CORONAVIRUS (COVID-19) ADVISORY
IMPORTANT INSTRUCTIONS ON HOW TO PARTICIPATE AND WATCH THE HERCULES CITY COUNCIL MEETING
On March 16, 2020, the Health Officer of Contra Costa County issued an Order through April 7, 2020 that directed that all individuals living in the county to shelter at their place of residence except that they may leave to provide or receive certain essential services or engage in certain essential activities and work for essential businesses and governmental services.
Under the Governor’s Executive Order N-25-20, this meeting may utilize teleconferencing or other virtual meeting platforms. Pursuant to the Governor’s Executive Order N-25-20, teleconferencing restrictions of the Brown Act have been suspended.
Beginning with the April 14, 2020 Hercules City Council meeting, the City Council will conduct its meeting utilizing ZOOM.
DUE TO THE SHELTER IN PLACE ORDERS AND PURSUANT TO EXECUTIVE ORDER N-25-20, direct public attendance or participation at council meetings has been suspended and the Council Chambers will be closed to the general public.
City Council and staff will participate virtually through the ZOOM application. Applicants, consultants, and others with matters before the Council will be allowed to participate via ZOOM but must make prior arrangements with the City Clerk. The public may log into the Zoom meeting to provide their public comment virtually.
Individuals wishing to address the City Council as part of the Zoom meeting are asked to provide the following information:
1. (Optional) - Name, address and contact information of person providing comments.
2. General topic or agenda item you wish to comment on.
PLEASE NOTE: For Special Closed Session meetings public comments must be submitted in written form either electronically via email, mailed in, or hand delivered prior to the meeting. The Zoom meeting credentials for closed session meetings are not shared publicly. Written public comments will be provided to City Council prior to the meeting and posted to the City’s agenda website.
For regular City Council meetings, all virtual public comments are allowed up to 3 minutes to relay their message or concern. All virtual public comments are recorded and become part of the public record. A limit of 30 minutes will be devoted to taking virtual public comment during the first public comment period on the agenda. If any speaker comments have not been accommodated prior to the initial 30 minute period, time will be reserved at the conclusion of the meeting for the remaining virtual public comments.
Please refer to the Zoom meeting information on the front cover of the Agenda.
How to watch the meeting from home:
1. Comcast Channel 28
2. Livestream online at https://hercules.legistar.com/Calendar.aspx
We are happy to accommodate written public comments. Written public comment will be accepted by email to [email protected] and will be available on the City’s website. Additional ways to provide your public comment is to mail your comment to City of Hercules, ATTN: City Clerk – Public Comment (Meeting Date), 111 Civic Drive, Hercules, CA 94547 via USPS in time to reach the City Clerk no later than 4:00 p.m. on the day of the meeting or by telephone by calling (510) 799-8215 no later than 4:00 p.m. on the meeting date. For written public comments:
1. Subject Line to contain the words “PUBLIC COMMENTS”
2. (Optional) - Name, address and contact information of person providing comments.
3. General topic or agenda item you wish to comment on.
All written comments received by the close of the public comment period will be available after the meeting as supplemental materials and will become part of the official meeting record, and they will not be read during the meeting. The City cannot guarantee that its network and/or the site will not be uninterrupted. To ensure that the City Council receives your written comments, you are strongly encouraged to submit your comments in writing in advance of the meeting by 4:00 p.m. on the day of the Council meeting.
Tuesday, January 11, 2022
5:30 PM
City of Hercules
111 Civic Drive
Hercules, CA 94547
City Council
Mayor Dion Bailey
Vice Mayor Alexander Walker-Griffin
Council Member Dan Romero
Council Member Chris Kelley
Council Member Tiffany Grimsley
Dante Hall, City Manager
Patrick Tang, City Attorney
Lori Martin, City Clerk
Meeting Agenda
SPECIAL JOINT MEETING OF THE CITY COUNCIL AND
SUCCESSOR AGENCY
Zoom Meeting ID: 826 8570 4004
Zoom Passcode: 224261 / Zoom Phone #: 1-669-900-6833
1 January 11, 2022City Council Meeting Agenda
To view webcast of meetings, live or on demand, go to the City's website at www.ci.hercules.ca.us I. SPECIAL MEETING - CLOSED SESSION – 5:30 P.M. CALL TO ORDER - ROLL CALL II. PUBLIC COMMUNICATION - CLOSED SESSION ITEMS
III. CONVENE INTO CLOSED SESSION
The Hercules City Council will meet in Closed Session regarding the following:
1. 22-010
CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED LITIGATION
(Government Code Section 54956.9 (e)(1): In two (2) matters.
IV. REGULAR MEETING – 7:00 P.M. CALL TO ORDER - ROLL CALL V. REPORT ON ACTION TAKEN IN CLOSED SESSION
VI. PLEDGE OF ALLEGIANCE
VII. MOMENT OF SILENCE
VIII. INTRODUCTIONS/PRESENTATIONS/COMMISSION REPORTS
1. 22-016
Presentation and Update from Contra Costa County Animal Control Services
Presentation - Animal ControlAttachments:
IX. AGENDA ADDITIONS/DELETIONS
X. PUBLIC COMMUNICATIONS
This time is reserved for members of the public to address issues not included in the agenda. In accordance with the Brown Act, Council will refer to staff any matters brought before them at this time, and those matters may be placed on a future agenda.
Individuals wishing to address the City Council are asked to complete a form indicating the name and address of the speaker and the general topic to be addressed. Speakers must make their comments from the podium and will be allowed 3 minutes to discuss their concerns. All public comments are recorded and become part of the public record. A limit of 30 minutes will be devoted to taking public comment at this point in the agenda. If any speakers remain at the conclusion of the initial 30 minute period, time will be reserved at the conclusion of the meeting to take the remaining comments.
2 January 11, 2022City Council Meeting Agenda
XI. PUBLIC HEARINGS
1. 22-015 Minor Subdivision (MS #478-21) for the Safeway Shopping Center to Subdivide the 6.7-Acre Site Into Three (3) Parcels and Dedicate 0.29 Acres to the City for Public Right-of-Way
Recommendation: Open the public hearing and receive public comments, close the public hearing and consider adoption of a Resolution approving Parcel Map M.S. (Minor Subdivision) #478-21 subdividing the 6.7-acre Safeway Shopping Center site into three (3) parcels and dedicating 0.29 acres to the City for public right-of-way.
Staff Report - Safeway Parcel Map MS 478-21-CC -2022-01-11 Attach 1- Safeway Parcel Map MS 478-21-CC Reso
Attach 2 - Safeway Parcel Map - MS 478-21
Attach 3 - Safeway Parcel Map - Recorded Declaration of ECR Attach 4 - Safeway Parcel Map - Site Exhibit
Attachments:
XII. CONSENT CALENDAR
1. 22-002 Minutes
Recommendation: Approve the regular meeting minutes of December 14, 2021.
Minutes - 121421 - RegularAttachments:
2. 22-006 Computer and Electronic Surplus
Recommendation: Adopt a Resolution declaring certain computer property and electronic as surplus and authorizing the proper disposal of said property.
Staff Report - IT Surplus 011122
Attach 1 - Resolution - 2021 IT Surplus Reso including Exhibit A Attachments:
3. 22-008 Recognized Obligation Payment Schedule for the Period of July 1, 2022 through June 30, 2023 (ROPS 22-23)
Recommendation: Adopt a Resolution approving the Recognized Obligation Payment Schedule for the period of July 1, 2022 through June 30, 2023 (ROPS 22-23).
Staff Report - ROPS 22-23_SA
Attach 1 - SA Resolution - ROPS 22-23 draft (1)
Attach 2 - Hercules ROPS 22-23_12.2.21 (1)
Attachments:
3 January 11, 2022City Council Meeting Agenda
XIII. DISCUSSION AND/OR ACTION ITEMS
1. 22-007 Approval of Successor Agency to the Hercules Redevelopment Agency 2022 Tax Allocation Refunding Bonds and Related Actions Recommendation: Adopt a Resolution of the Successor Agency to the Hercules RDA authorizing the issuance and sale of tax allocation refunding bonds in an amount of not to exceed $98 million, and approving the form of an Indenture of Trust, the form of Escrow Agreement, a form of Bond Purchase Agreement, a form of Continuing Disclosure Certificate, and authorizing certain other actions in connection therewith.
Staff Report - 2022 TABs _FINAL (1)
Attach 1 - Good Faith Estimates (1)
Attach 2 - Successor Agency Resolution TABs Refunding
Attach 3 - Hercules_MA Savings Analysis_FINAL (1)
Attach 4 - Indenture (Hercules 2022 TARBs)
Attach 5 - Form of Escrow Agreement for Agenda (Hercules) Attach 6 - Bond Purchase Agreement - Hercules 2022 TABs, 2[3] (1) Attach 7 - Continuing Disclosure Certificate (Hercules 2022 TARBs) Attachments:
2. 22-009 ARPA - Results of the Business and Community Surveys and Funding and Funding Principals
Recommendation: Accept the proposed set of principals to assist in developing the plan for use of the ARPA funds.
Staff Report - Results of Bus and Comm Surveys ^0 ARPA Fnding Principles (1) -DH Attach 1 - Business Survey Result
Attach 2 - Community Survey Result
Attach 3 - Suggestion from City Council members
Attachments:
3. 22-012 Commission Appointments to City Commissions and Regional Boards and Committee
Recommendation: Consider making appointments to city commissions for the start of two (2) year terms and making an appointment to the Contra Costa Mosquito and Vector Control Board.
Staff Report - Commission Appointments 2022Attachments:
4. 22-013 2022 Council Appointments on Regional Committees and Council Subcommittees
Recommendation: Appointment of members of the City Council by the Mayor to both Regional Committees and Council Subcommittees.
Staff Report - Appointments to Regional Committees
Attach 1 - 2021 Regional Committees and Council Subcommittees Attachments:
4 January 11, 2022City Council Meeting Agenda
5. 22-004 Discussion of Building Decarbonization through Possible Adoption of All-Electric Building Code Amendment
(Continued discussion from CIty Council meeting on September 28, 2021) Recommendation: Receive report, discuss, and provide direction if and what type of all-electric ordinance should or should not be pursued.
Staff Report - Building Decarbonization - 2022-01-11
Attach 1 - Staff Report to the City Council – September 28, 2021 Attach 2 - All-Electric Model Reach Code
Attach 3 - Electric Preferred Model Rach Code
Attach 4 - 2019 Code-cycle adopted reach codes
Attach 5 - Contra Costa County Ordinance No. 2022-02 All-Electric Buildings Attach 6 - California Energy Codes & Standards Study
Attach 7 - Cost-Effectiveness results for Hercules Climate Zone 3 Attachments:
XIV. PUBLIC COMMUNICATIONS
This time is reserved for members of the public who were unavailable to attend the Public Communications period during Section X of the meeting, or were unable to speak due to lack of time. The public speaker requirements specified in Section X of this Agenda apply to this Section.
XV. CITY COUNCIL/CITY MANAGER/CITY ATTORNEY ANNOUNCEMENTS,
COMMITTEE, SUB-COMMITTEE AND INTERGOVERNMENTAL COMMITTEE REPORTS
AND FUTURE AGENDA ITEMS
This is the time for brief announcements on issues of interest to the community. In accordance with the provisions of the Brown Act, matters which do not appear on this agenda but require City Council discussion may be either (a) referred to staff or other resources for factual information or (b) placed on a future meeting agenda.
XVI. ADJOURNMENT
The next Regular Meeting of the City Council will be held on Tuesday, January 25, 2022 at 7:00 p.m. in the Council Chambers.
Agendas are posted in accordance with Government Code Section 54954.2(a) or Section 54956.
Members of the public can view electronic agendas and staff reports by accessing the City website at www.ci.hercules.ca.us and can receive e-mail notification of agenda and staff report postings by signing up to receive an e-notice from the City’s homepage. Agendas and staff reports may also be obtained by contacting the Administrative Services Department at (510) 799-8215. (Posted: January 6, 2022)
5 January 11, 2022City Council Meeting Agenda
THE HERCULES CITY COUNCIL ADHERES TO THE FOLLOWING POLICIES,
PROCEDURES AND REGULATIONS REGARDING CITY COUNCIL MEETINGS
1. SPECIAL ACCOMODATIONS: In compliance with the Americans with Disabilities Act, if you require special accommodations to participate at a City Council meeting, please contact the City Clerk at 510-799-8215 at least 48 hours prior to the meeting.
2. AGENDA ITEMS: Persons wishing to add an item to an agenda must submit the final written documentation 12 calendar days prior to the meeting. The City retains the discretion whether to add items to the agenda. Persons wishing to address the City Council otherwise may make comments during the Public Communication period of the meeting.
3. AGENDA POSTING: Agendas of regular City Council meetings are posted at least 72 hours prior to the meeting at City Hall, the Hercules Swim Center, Ohlone Child Care Center, Hercules Post Office, and on the City’s website (www.ci.hercules.ca.us),
4. PUBLIC COMMUNICATION: Persons who wish to address the City Council should complete the speaker form prior to the Council's consideration of the item on the agenda.
Anyone who wishes to address the Council on a topic that is not on the agenda and is relevant to the Council should complete the speaker form prior to the start of the meeting. Speakers will be called upon during the Public Communication portion of the meeting. In accordance with the Brown Act, the City Council may not take action on items not listed on the agenda. The Council may refer to staff any matters brought before them at this time and those matters may be placed on a future agenda.
In the interests of conducting an orderly and efficient meeting, speakers will be limited to three (3) minutes.
Anyone may also submit written comments at any time before or during the meeting.
5. CONSENT CALENDAR: All matters listed under Consent Calendar are considered to be routine and will be enacted by one motion. There will be no separate discussion of these items unless requested by a member of the Council or a member of the public prior to the time the City Council votes on the motion to adopt.
6. LEGAL CHALLENGES: If you challenge a decision of the City Council in court, you may be limited to raising only those issues you or someone else raised at the meeting or in written correspondence delivered at, or prior to, the meeting. Actions challenging City Council decisions shall be subject to the time limitations contained in Code of Civil Procedure Section 1094.6.
6 CONTRA COSTA COUNTY ANIMAL
SERVICES
ANIMAL SERVICES UPDATE
JANUARY11, 2022
1 7
Our Department
Field Services – Protecting public health & safety
through enforcement of the County’s Animal
Ordinance, rabies control and field patrols.
Shelter Operations – Intake and daily care of
animals, maintenance of animals and kennels,
owner surrender support.
Medical Services – Medical care and treatment of
animals, emergency care, low-cost spay/neuter
surgeries, low-cost vaccination and microchip
clinics, etc.
Administration – In-house call center, licensing
programs, budget and human resources,
contract management, fleet management.
Community Services – Adoptions program,
volunteer program, public events and humane
education.
8 Pinole Shelter Closure
3 In September of 2020, the Contra Costa Board of Supervisors voted to close the Pinole Animal Shelter .
CCAS supported this decision since we have long lacked the necessary financial resources and staffing to adequately run the shelter . The primary services utilized by West County residents at the Pinole Shelter included: adoptions, stray animal impounds and return to owner services.
CCAS will continue to provide these services to West County residents through current practices, mobile events and strategic partnerships. Field Services response times were not affected because our Animal Services Officers have always been dispatched from our Martinez facility.
CCAS veterinarian speaking with residents at 3/13/21 West County Microchip Clinic in Hercules
9 Field Services – Top Activities in Hercules
4 2021 Activity Report - Top Activities for
Hercules 2021
Stray Activities 326
Deceased Activities 94
Investigation Activities 77
Assist Activities 19
Other Activities 17
Total Activities 533
10 Animal Care Agency Comparisons
Municipal Shelter:
FY 20/21
Rate Per Capita
City of Antioch $15.44
City of Oakland $12.09
Sacramento County $13.10
Contra Costa County $6.79
❑Contra Costa Animal Services ranks low
on cost per capita in comparison to
other municipal shelters.
❑The City of Antioch increased their rates
for animal services by 19% in FY 2020/21,
which brought them to $15.44 per
capita.
5 11
Mandated Services Covered By Current Fees
6 ▪ Special Enforcement
▪Mandatory Spay/Neuter Prior to Adoption (as
required per County Ordinance)
▪Major Case Investigations (i.e. Cruelty/Abuse)
▪Animal Housing
▪ Stray & Aggressive Animal Patrols (Inc. Livestock)
▪ Impoundment of Stray Dogs, Sick/Injured/In
Danger & Aggressive Animals
▪ Sheltering/Care of Impounded Animals (Inc.
Vaccination, Food, Humane & Emergency Veterinary
Care, etc.)
▪ Housing for Animals Displaced by Disasters
▪ Return Animals Home & Adoption/Transfer of
Available Animals
▪ Rabies Control
▪ Licensing & Enforcement
▪ Bite Investigations
▪ Patrols
▪ Quarantine of Potential Rabies Suspects
▪ Rabies Testing
▪ Rabies Vaccine Clinics
▪ Dangerous/Potentially Dangerous Animals
▪ Investigations
▪ Impoundment & Sheltering
▪ Hearings
▪ Permits & Enforcement
▪ Other State & Local Laws
▪ Animal Noise Enforcement & Hearings
▪ Fulfilling PRA Requests
12 Additional Services Provided By CCAS
7 ▪ Low-cost Vaccine & Spay/Neuter Clinic for
Residents of Contra Costa County
▪ Humane Education & Enrichment Programs
▪ Deceased Animal Impoundment
▪ Deceased animals located on the public right of
way.
▪ Deceased domestic animals on private property.
▪ Local Agency Assists
▪ Police
▪ Fire
▪ Code Enforcement
▪ Administration
▪ Provide support for on-going operations
– budget and fiscal services, human
resources, contract management, fleet
management and information
technology
▪ In-house call center – five days a week,
Tues.-Sat. Phone, online, email and in
person by appointment
▪ Dispatch services through Contra Costa
Sheriff’s Department contract 24/7
13 City Agreement History
The city service agreements were established in 1985 for mandated programs and the enforcement of all animal related laws. The original city fees were based on Department costs at that time per capita.
In 2005, the Animal Services Department began increasing city fees based on the cities population growth and Consumer Price Index (CPI) percentage. In 2011, the Department suspended the annual CPI increase due to the economic climate. The annual CPI increase was reinstated in 2017, though no action was taken to address the gap left by the four-year suspension of fee increases. 8 14
City Agreement Update Timeline
2016 – 2019 - CCAS conducts meetings with City Managers and Police Chiefs in contract cities to discuss the need for changes to the existing city agreement, one that would be more equitable for the cities and the County alike. January – September 2020 - The Contra Costa County Board of Supervisors approved a new agreement and an increase in city fees. Upon notification to the cities, the Public Managers Association (PMA) informed the County that the fee structure could create a financial hardship.
The County heard the concerns and advised the cities of a revised fee for FY20/21 in the amount of $6.67 per capita, dismissing the new fee structure in favor of the standard CPI increase.
The County advised the cities of service level changes that would become effective October 2020 due to lack of adequate funding, including limiting deceased animal pickups.
May 2021 – The cities agreed to increase the Per Capita Rate by $0.12 to add an additional Utility Worker for deceased animal pickups, resulting in a total of $6.79 Per Capita for FY 2021/22. July 2021 – The Department began hosting a series of regional meetings with the Board of Supervisors and City Managers to receive feedback on current services, needs and an updated fee structure for city agreements. December 2021 – Cities were notified about an updated fee structure that includes a phased approach to minimize fiscal impacts, which will take effect July 1, 2022.
January 2022 – June 2022 – CCAS staff will be meeting with city staff to finalize a new service agreement with performance metrics. 9 15
Updated Fee Structure
10 Phase one (1) will commence July 1, 2022, with an
estimated per capita fee of $7.97 for FY22/23. This includes the following changes in services:
• Add 1.0 FTE Field Services Sergeant for increased Animal Services Officer (ASO) beat coverage, improved response time to dangerous animal cases, improved public support, and training.
• Add 1.0 FTE Field Utility Worker to reduce response times for the pickup of deceased animals, while allowing us to resume deceased domesticated animal pick-up on private property and picking up deceased wildlife from private property per the County fee schedule for the homeowner. • Add 1 Animal Services truck for deceased animal pickups. • Add 2.0 FTE Animal Care Coordinators to enhance our life saving programs serving our County Residents, such as the Pet Retention, Transfer Partner and Adoption programs.
Phase two (2) will commence on July 1, 2023, with an
estimated per capita fee of $9.11 for FY 23/24. This
includes the following changes in services:
• Add 3.0 FTE Animal Services Officers (ASO) to expand beat coverage and further decrease priority one response times.
• Add 2 Animal Services trucks to accommodate the increased field services staff.
• Add 1.0 FTE Animal Care Coordinator to decrease length of stay for impounded animals and continue focus on pet retention program services.
• Add 1.0 FTE Medical Supervisor to increase the efficiency of our on - site low-cost spay/neuter and vaccine services for our county residents.
16 Updated Fee Structure FY 21/22 – FY 23/24
11 17
Thank You & Questions
We
appreciate
our city
partners!
18 STAFF REPORT TO THE CITY COUNCIL
DATE: Regular Meeting of January 11, 2022
TO: Members of the City Council
VIA: Dante G. Hall, City Manager
SUBMITTED BY: Michael Roberts, Public Works Director/City Engineer
SUBJECT: Minor Subdivision (MS #478 -21) for the Safeway Shopping Center to subdivide the 6.7-acre site into three parcels and dedicate 0.29 acres to the City for public right-of-way
RECOMMENDED ACTION:
Open the public hearing and receive public comments, close the public hearing and consider adoption of a resolution approving Parcel Map M.S (Minor Subdivision) #478-21 subdividing the 6.7-acre Safeway Shopping Center site into three parcels and dedicating 0.29 acres to the City for public right- of-way.
COMMISSION ACTION AND RECOMMENDATION:
The Planning Commission unanimously recommended approval of Parcel Map M.S. 478-21 at their November 15, 2021 meeting.
FISCAL IMPACT OF RECOMMENDATION:
There is no fiscal impact to the City associated with the proposed parcel map.
DISCUSSION:
In July 2021 McNellis Partners submitted an application to subdivide the 6.7-acre site at 4080 San Pablo Avenue into 3 parcels. The site is located at the northeast corner of the intersection of San Pablo Avenue and Sycamore Avenue (Assessor’s Parcel Number 404-040-040-2) and is commonly known as the Safeway Shopping Center.
As shown on the subdivision map, MS #478-21 (Att #2), Parcel A is 4.63 acres and includes Safeway, Parcel B is 0.69 acres and includes the building home to current tenants Peet’s Coffee and Chase Bank, and Parcel C is 1.09 acres and is for the fueling center and kiosk/convenience store.
MS #478-21 incorporates by reference the “Declaration of Easements with Covenants and Restrictions Affecting Land,” recorded July 19, 2018 as Document No. 2018-0115162-00 (Att #3), 19 which governs use of common areas including access, parking, utility and service easements, and shared maintenance.
The 0.29 acres proposed to be dedicated to the City is to re -establish the property line so that the newly constructed sidewalk along the project street frontage falls within the public right-of-way (i.e., City ownership)(Att #4).
McNellis Properties has indicated they are proceeding with the minor subdivision so that tax bills can be received separately and directly.
MS #478-21 has been reviewed by the Community Development Director, City Engineer, and Acting City Land Surveyor and has been dete rmined to conform to all applicable the municipal code provisions, the City’s General Plan, the project site’s zoning designation of General Commercial, and the Subdivision Map Act. Given the Declaration of Easements with Covenants and Restrictions Affecting Land, no separate conditions of approval are recommended.
Minor Subdivision #478-21 for the Safeway Shopping Center has been determined to be a Class 15 Categorical Exemption under the California Environmental Quality Act (CEQA), Section 15315, “Minor Land Divisions.”
Staff recommends that the City Council adopt a resolution (Att #1) approving Minor Subdivision #478-21.
ATTACHMENTS:
1. City Council Resolution
2. Parcel Map M.S. 478-21
3. Recorded Declaration of Easements with Covenants and Restrictions Affecting Land
4. Site Exhibit
20 HERCULES CITY COUNCIL
RESOLUTION NO. 22-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HERCULES APPROVING MINOR SUBDIVISION #478 -21 FOR THE SITE COMMONLY REFERRED TO AS THE “SAFEWAY SHOPPING CENTER,” LOCATED AT 4080 SAN
PABLO AVENUE, AT THE CORNER OF THE INTERSECTION OF SAN PABLO AVENUE AND SYCAMORE AVENUE (EXISTING APN 404 -040-0040-2), SUBDIVIDING THE 6.7-ACRE SITE INTO THREE PARCELS AND DEDICATING 0.29 ACRES OF PUBLIC RIGHT OF WAY TO THE CITY.
WHEREAS, the Project Site currently consists of one par cel of approximately 6.7 acres bearing Assessor Parcel Number (APN) 404-040-040-2; and
WHEREAS, the Property Owner, McNellis Partners, has submitted an application for Minor Subdivision (MS) #478-21 to subdivide the property into three parcels; and
WHEREAS, Parcel A is 4.63 acres and includes Safeway, Parcel B is 0.69 acres and includes building with current tenants Peet’s Coffee and Chase Bank, and Parcel C is 1.09 acres and is for the fueling center and kiosk/convenience store; and
WHEREAS, MS #478-21 incorporates by reference the “Declaration of Easements with Covenants and Restrictions Affecting Land,” recorded July 19, 2018, as Document No. 2018 - 0115162-00, which governs the use of common areas including access, parking, utility and service easements, and shared maintenance; and
WHEREAS, 0.29 acres is dedicated to the City to re -establish the property line so that the newly constructed sidewalk along the project street frontage falls within the public right of way (i.e., City ownership); and
WHEREAS, MS #478-21 for the Safeway Shopping Center has been determined to be a Class 15 Categorical Exemption under the California Environmental Quality Act (CEQA), Section 15315, “Minor Land Divisions;” and
WHEREAS, MS #478 -21 has been reviewed by the Comm unity Development Director, City Engineer, and Acting City Land Surveyor and has been determined to conform to all applicable municipal code provisions and the Subdivision Map Act.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Hercules that the City Council hereby approves Parcel Map M.S (Minor Subdivision) #478-21 subdividing the 6.7- acre Safeway Shopping Center site into three parcels and dedicating 0.29 acres to the City for public right-of-way.
The foregoing Resolution was duly an d regularly adopted at a regular meeting of the City Council of the City of Hercules held on the 11th day of January 2022 by the following vote of the Council:
21 AYES:
NOES:
ABSTAIN:
ABSENT:
____________________________
Dion Bailey, Mayor
ATTEST:
Lori Martin, MMC
Administrative Services Director/City Clerk
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88 111 Civic Drive
Hercules, CA 94547City of Hercules
Meeting Minutes
City Council
Mayor Chris Kelley
Vice Mayor Dion Bailey
Council Member Alexander Walker-Griffin
Council Member Dan Romero
Council Member Tiffany Grimsley
Dante Hall, City Manager
Patrick Tang, City Attorney
6:00 PMTuesday, December 14, 2021
AMENDED AGENDA
Zoom Meeting ID: 898 1418 3682
Zoom Passcode: 923369 / Zoom Phone # 1-669-900-6833
I. AMENDED SPECIAL MEETING - CLOSED SESSION – 6:00 P.M. CALL TO ORDER -
ROLL CALL
Mayor Kelley called the meeting to order at 6:05 PM.
Council Member T. Grimsley, Council Member D. Romero, Council Member A.
Walker-Griffin, Vice Mayor D. Bailey, and Mayor C. Kelley
Present: 5 -
II. PUBLIC COMMUNICATION - CLOSED SESSION ITEMS
None.
III. CONVENE INTO CLOSED SESSION
City Attorney Tang announced the items listed on the agenda to be discussed in closed session.
Mayor Kelley recessed the meeting at 6:06 PM.
1. 21-409 Conference with Legal Counsel - Anticipated Litigation Pursuant to Government Code Section 54956.9(d)(4): In one (1) matter: National Prescription Opiate Litigation.
2. 21-420 Pursuant to Government Code Section 54956.8, Conference with Real Property Negotiators: Property Address: 1991 Railroad Ave, Hercules, CA 94547; Real Property Negotiator: Dante Hall, City Manager
89 December 14, 2021City Council Meeting Minutes
IV. REGULAR MEETING – 7:00 P.M. CALL TO ORDER - ROLL CALL Mayor Kelley called the meeting to order at 7:03 PM.
Council Member T. Grimsley, Council Member D. Romero, Council Member A.
Walker-Griffin, Vice Mayor D. Bailey, and Mayor C. Kelley
Present: 5 -
V. REPORT ON ACTION TAKEN IN CLOSED SESSION
City Attorney Tang reported that the City Council authorized the City Attorney on behalf of the City to join the Opiate Settlement with an estimated award amount for the City of Hercules of $150,000 with those funds to be dedicated to opiate mitigation measures. City Attorney Tang reported that there were no reportable or final actions taken on the Real Property Negotiator item.
VI. PLEDGE OF ALLEGIANCE
The Pledge of Allegiance was led by Mayor Kelley.
VII. MOMENT OF SILENCE
Mayor Kelley called for a moment of silence for Kevin Nashita, a TV news security guard who was fatally shot in Oakland during an attempted robbery.
VIII. INTRODUCTIONS/PRESENTATIONS/COMMISSION REPORTS
None.
IX. AGENDA ADDITIONS/DELETIONS
City Manager Hall made a request to move Discussion/Action Item #XIII.1, Ordinance 535 to the consent calendar. Mayor Kelley obtained a consensus of City Council to move the item.
X. PUBLIC COMMUNICATIONS
None.
XI. PUBLIC HEARINGS
None.
XII. CONSENT CALENDAR
By consensus of City Council, Item XIII.1, Ordinance 535 was moved to the consent calendar.
MOTION: A motion was made by Council Member Romero, seconded by Vice Mayor Bailey, to adopt the consent calendar as amended. The motion carried by the following vote:
90 December 14, 2021City Council Meeting Minutes
Aye: Council Member T. Grimsley, Council Member D. Romero, Council Member A.
Walker-Griffin, Vice Mayor D. Bailey, and Mayor C. Kelley 5 -
1. 21-404 Minutes
Recommendation: Approve the regular meeting minutes of November 9, 2021 and the special meeting minutes of November 17, 2021.
Approved.
2. 21-396 Emergency Declaration Extension
Recommendation: Adopt two (2) Resolutions extending the Declaration of Local Emergency by 30 days to January 1, 2022 and by another 30 days to January 31, 2022.
Approved.
3. 21-397
Local Agency Investment Fund (LAIF) Signatory Authorizations Recommendation: Adopt a Resolution rescinding Resolution #15-094 authorizing the investment of the City of Hercules monies in the Local Agency Investment Fund (LAIF) and authorizing City Officers and their successors in office to order deposits or withdrawals of city monies to/from said fund.
Approved.
4. 21-398
Annual Local Commission Appointment List
Recommendation: Review and receive the annual local commission appointment list commonly referred to as the Maddy Act.
Approved.
5. 21-406 Add City Clerk/Public Information Officer to the City's Classification Plan and Amending the Senior Management and Unrepresented Employee Salary Schedule
Recommendation: Adopt a Resolution adding City Clerk/Public Information Officer to the City's classification plan and approve an amended senior management and unrepresented employee salary schedule.
Approved.
XIII. DISCUSSION AND/OR ACTION ITEMS
1. 21-408
Ordinance Amending Title 5, "Sanitation and Health", Chapter 2, "Mandatory Garbage/Solid Waste Disposal" of the Hercules Municipal Code to comply with Senate Bill 1383 "Short Lived Climate Pollutant Reduction Act" Pertaining to Garbage, Recyclable Materials, and Organic Waste
91 December 14, 2021City Council Meeting Minutes
Recommendation: Waive the second reading and adopt Ordinance 535.
This item was moved to the consent calendar and adopted.
2. 21-402 Update on Returning to In-Person Hybrid Meetings Recommendation: Receive report, discuss, and provide direction to staff.
City Manager Hall introduced the item and provided a staff report. City Council discussed and provided comments. By consensus of City Council direction was provided to staff to bring this item back for further evaluation in January.
3. 21-399
City Council Regular Meeting Dates for 2022
Recommendation: Review the schedule of regular meeting dates in 2022 and consider canceling one or more regular meetings in August and the November 22nd and December 27th regular meetings.
City Manager Hall introduced the item and provided a staff report. City Council discussed the item and by consensus of City Council directed staff to cancel the second meeting in August, November and December and to bring the calendar back for discussion in June or July to further evaluate if the City Council wishes to cancel the first meeting in August.
MOTION: A motion was made by Council Member Walker-Griffin, seconded by Council Member Grimsley, to approve the meeting calendar. The motion carried by the following vote:
Aye: Council Member T. Grimsley, Council Member D. Romero, Council Member A.
Walker-Griffin, Vice Mayor D. Bailey, and Mayor C. Kelley 5 -
4. 21-401
Selection of Mayor and Vice Mayor
Recommendation: City Council to nominate and appoint a Mayor and Vice Mayor for 2022.
City Manager Hall introduced the item and provided a staff report. Mayor Bailey and Vice Mayor Walker-Griffin made remarks as the incoming Mayor and Vice Mayor for 2022.
MOTION: A motion was made by Council Member Grimsley, seconded by Council Member Walker-Griffin, to nominate and appoint Vice Mayor Bailey as Mayor for 2022. The motion carried by the following vote:
Aye: Council Member T. Grimsley, Council Member D. Romero, Council Member A.
Walker-Griffin, Vice Mayor D. Bailey, and Mayor C. Kelley 5 -
MOTION: A motion was made by Vice Mayor Bailey, seconded by Council Member Romero, to nominate and appoint Council Member Walker-Griffin as the Vice Mayor for 2022. The motion carried by the following vote:
Aye: Council Member T. Grimsley, Council Member D. Romero, Council Member A.
Walker-Griffin, Vice Mayor D. Bailey, and Mayor C. Kelley 5 -
92 December 14, 2021City Council Meeting Minutes
5. 21-403 Proclamation Commending the Dedication and Leadership of Mayor Chris Kelley to the Hercules Community
Mayor Bailey read aloud a Proclamation for outgoing Mayor Kelley commending the dedication and leadership of Mayor Chris Kelley to the Hercules community. Mayor Chris Kelley provided comments. Members of the City Council thanked Mayor Kelley for her leadership in 2021.
City Clerk Martin read aloud a public statement from former Council Member Boulanger thanking and congratulating Mayor Chris Kelley.
City Clerk Martin,City Manager Hall and City Attorney Tang provided comments to Mayor Kelley.
Public Speakers: Supervisor Federal Glover thanked Mayor Kelley for her dedication and service to the City of Hercules. Tanya Little also thanked Mayor Kelley for her dedication and service to the City of Hercules.
6. 21-400
2022 Council Appointments on Regional Committees and Council Subcommittees
Recommendation: Express interest and availability for the 2022 Council appointments on regional committees and Council subcommittees to be assigned by the Mayor at the January 11, 2022 City Council meeting.
Mayor Bailey requested that the City Council review the Regional Appointments and send their requests for regional committees for 2022 to City Clerk Martin and he will make selections and appointments at the January 11, 2022 City Council meeting.
XIV. PUBLIC COMMUNICATIONS
Public Speaker: Supervisor Federal Glover welcomed the new City Manager Dante Hall and commended City staff for their hard work and dedication. Supervisor Glover also made remarks to the incoming Mayor and Vice Mayor.
XV. CITY COUNCIL/CITY MANAGER/CITY ATTORNEY ANNOUNCEMENTS,
COMMITTEE, SUB-COMMITTEE AND INTERGOVERNMENTAL COMMITTEE REPORTS
AND FUTURE AGENDA ITEMS
City staff and Council Members reported on attendance at events and community and regional meetings.
Future Agenda Items:
Council Member Walker-Griffin requested a discussion item regarding electric vehicle charging stations and ideas on providing incentives to companies to bring their product to Hercules. Mayor Bailey obtained a
93 December 14, 2021City Council Meeting Minutes
consensus of City Council to add this item to a future agenda.
XVI. ADJOURNMENT
Mayor Bailey adjourned the meeting at 8:19 p.m.
_________________________________
Dion Bailey, Mayor
Attest:
_______________________________
Lori Martin, MMC
Administrative Services Director/City Clerk
94 STAFF REPORT TO THE CITY COUNCIL
DATE: Regular Meeting of January 11, 2022
TO: Members of the City Council
VIA: Dante G. Hall, City Manager
SUBMITTED BY: Lori Martin, Administrative Services Director
SUBJECT: Computer and Electronic Surplus
RECOMMENDED ACTION:
Adopt a Resolution declaring certain computer property and electronics as surplus and authorizing the proper disposal of said property.
COMMISSION/SUBCOMMITTEE ACTION AND RECOMMENDATION:
There was no commission or subcommittee review of this item.
FISCAL IMPACT OF RECOMMENDATION:
There is no fiscal impact for this item.
DISCUSSION:
Over the past two years, staff has accumulated several IT equipment and electronics that are considered inoperable, mainly due to age and failing parts. Servers that still have working hard drives have been reformatted to destroy all information stored in memory. Staff is requesting that the equipment be declared surplus and that staff be authorized to properly dispose of said property.
ATTACHMENTS:
1. Resolution including Exhibit A – List of surplus property 95 HERCULES CITY COUNCIL
RESOLUTION NO. 22-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HERCULES
DECLARING CERTAIN COMPUTER PROPERTY AND ELECTRONICS AS SURPLUS
AND AUTHORIZING THE PROPER DISPOSAL OF SAID PROPERTY
WHEREAS, over the last year, staff has accumulated several IT equipment and electronics that are considered inoperable, recent projects replacing desktop computers and phones that are no longer in warranty/supported by the manufacture, age of equipment and failing parts; and
WHEREAS, servers that still have working hard drives have been reformatted to destroy all information stored in memory; and
WHEREAS, it has been determined that the city property listed in Exhibit A is no longer needed and is considered surplus.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Hercules as follows:
The City Council hereby dec lares certain City property a s surplus, as identified in Exhibit A, attached hereto, and authorizes the proper disposal of said property.
The foregoing Resolution was duly and regularly adopted at a regular meeting of the City Council of the City of Hercules held on the 11th day of January 2022 by the following vote of the Council:
AYES:
NOES:
ABSTAIN:
ABSENT:
____________________________
Dion Bailey, Mayor
ATTEST:
Lori Martin
Administrative Services Director/City Clerk
96 EXHIBIT A
Surplus IT Items 20 21
Desktop/Laptop Computers
Dell Optiplex 3020 (33 count)
Dell Precision
Dell Precision T3500
Laptop Panasonic CF-31
Laptop Panasonic CF-29 (2 count)
Laptop Lenovo E440
Laptop Lenovo E431
HP Proliant ML150G6
Cisco Phones
Cisco 7902 Phones (11 count)
Cisco 7940 Phones (88 count)
SERVERS/STORAGE DEVICES
IBM AS400 (2 count)
Netgear Readynas 2100
HP Proliant DL360 G6
Rockey Relay Lightspeed (2 count)
PureStorage Fam10 (2 count)
Cisco UCS C220 M3 (5 count)
PRINTERS/SCANNERS/MULTIFUNCTION MACHINES
HP Laserjet P2055DN
HP Laserjet 1320
MISC IT EQUIPMENT
Tripplite SmartPRO UPS (2)
Dell monitors (5)
Insgnia Monitor (3)
JVC TV
DVD Player (2)
Extra keyboards, mice, power supplies, microwave, boombox and peripheral cables Cabling and switching equipment from Cable TV Control Room
97 THE CITY OF HERCULES AS SUCCESSOR AGENCY TO THE HERCULES
REDEVELOPMENT AGENCY
DATE: January 11, 2022
TO: The City of Hercules as Successor Agency to the Hercules Redevelopment Agency
VIA: Dante Hall, City Manager/Executive Director
SUBMITTED BY: Edwin Gato, Director of Finance
SUBJECT: Recognized Obligation Payment Schedule for the period of July 1, 2022 through June 30, 2023 (ROPS 22-23)
RECOMMENDED ACTION:
Adopt a resolution approving the Recognized Obligation Payment Schedule for the period July 1, 2022 through June 30, 2023 (ROPS 22-23).
DISCUSSION:
Health and Safety Code (HSC) Section 34177 requires that successor agencies must, amongst other things, prepare a Recognized Obligation Payment Schedules (ROPS) for each upcoming fiscal year.
A ROPS is the document that sets forth the maximum payment amounts and due dates of payments required by enforceable obligations. Enforceable obligations are defined in HSC Section 34171(d) and include the payment of bonds and loans, payments required by the federal government, judgments or settlements, any legally binding agreement or contract, and contracts or agreements necessary for the administration or operation of the successor agency.
HSC Section 34177(1) requires successor agencies to submit the ROPS to a Countywide Oversight Board and California Department of Finance (DOF) for approval.
The ROPS template used for the ROPS 22-23 includes the following worksheets:
1. Recognized Obligation Payment Schedule Summary
2. Recognized Obligation Payment Schedule – ROPS Detail - This worksheet includes a section for ROPS A (July 1, 2022 through December 31, 2022) and a section for ROPS 22- 23 B (January 1, 2023 through June 30, 2023).
3. Recognized Obligation Payment Schedule – Report of Cash Balances
4. Recognized Obligation Payment Schedule – Notes
98 Highlights for ROPS 22-23
Hercules ROPS 22-23 requests $12,074,536 in obligations from Redevelopment Property Tax Trust Funds (RPTTF). Obligations consist of bond debt service and related fees ($9.4 million), payments owed to third parties pursuant to various agreements entered into prior to dissolution ($2.4 million), and an administrative cost allowance ($250,000).
ROPS Item 16 do cuments a $50,496,029 loan repayment owed under a Cooperation Agreement between the City and former Redevelopment Agency. The City advanced funds to the Redevelopment Agency between fiscal years 1984-85 to 2010-11 for various redevelopment projects including but not limited to library, park and wastewater improvements. The loan repayment was previously denied by DOF because it was under litigation. Hercules and DOF have since settled their litigation. Although the Successor Agency does not anticipate the loan will be eligible for repayment unless the Successor Agency receives a finding of completion, the ROPS 22-23 documents the $50 million Total Outstanding Obligation in case Hercules becomes eligible for a finding of completion after pursuing a legislative solution. The ROPS 22-23 does not request repayment of the loan in the upcoming fiscal year.
The ROPS 22-23 Report of Cash Balance worksheet shows the Redevelopment Property Tax Trust Fund (RPTTF) money received for ROPS 19-20 (July 1, 2019 through June 30, 2020) was fully expended.
The Recognized Obligation Payment Schedule (ROPS) are posted on the City of Hercules website (www.ci.hercules.ca.us).
ATTACHMENTS:
1. Resolution approving the Recognized Obligation Payment Schedule (ROPS) for the period July 1, 2022 through June 30, 2023
2. ROPS 22-23
99 RESOLUTION NO. __
THE CITY OF HERCULES AS SUCCESSOR AGENCY TO THE HERCULES
REDEVELOPMENT AGENCY APPROVING THE RECOGNIZED OBLIGATION PAYMENT SCHEDULE FOR THE PERIOD JULY 1, 2022 THROUGH JUNE 30, 2023 (ROPS 22-23)
WHEREAS, on December 29, 2011, the California Supreme Court issued its final decision in the litigation of California Redevelopment Association v. Matosantos, upholding Assembly Bill x1 26 (codified as Health and Safety Code 34161-34191) (“ABx1 26”) and invalidating Assembly Bill x1 27 (the legislation that would have permitted redevelopment agencies to continue operation if their sponsoring jurisdiction agreed to make certain payments for the benefit of schools and special districts); and as a result, all California redevelopment agencies were dissolved, effective February 1, 2012; and
WHEREAS, pursuant to California Health and Safety Code (“HSC”) Section 34173(d), on January 10, 2012 by Resolution No 12-005, the Council of the City of Hercules elected to become the Successor Agency to the Hercules Redevelopment Agency (“Agency”) (non-housing); and
WHEREAS, HSC Section 34179 requires that certain Successor Agency actions are subject to Oversight Board approval; and
WHEREAS, HSC Section 34177 requires each Successor Agency to prepare a draft Recognized Obligation Payment Schedule (“ROPS”) and HSC Section 34180 requires the Oversight Board to approve same; and
WHEREAS, HSC Section 34177 provides that each ROPS sha ll be forward looking to the next fiscal year; and
WHEREAS, HSC Section 34177 (o) states that the Recognized Obligation Paym ent Schedule shall be submitted by the Successor Agency, after a pproval by the Oversight Board to the California Department of Finance.
NOW, THEREFORE, BE IT RESOLVED that the City of Hercules as Successor Agency to the Hercules Redevelopment Agency, hereby finds and determines:
(1) Approval of the ROPS for the period July 1, 2022 through June 30, 2023 (ROPS 22-23) attached hereto as Exhibit A.
(2) Successor Agency staff is directed to provide a copy of this Resolution along with the approved draft ROPS to the Contra Costa County Countywide Oversight Board, County Auditor Controller, the State Controller’s Office and the State Department of Finance.
The foregoing Resolution was duly and regularly adopted by the City of Hercules as Successor Agency to the Hercules Redevelopment Agency at its meeting held on the 11th day of January, 2022 by the following:
100
AYES:
NOES:
ABSENT:
ABSTAIN:
____________________________
Dion Bailey, Chair
ATTEST:
Lori Martin, City Clerk / Administrative Services Director
101
Recognized Obligation Payment Schedule (ROPS 22-23) - Summary Filed for the July 1, 2022 through June 30, 2023 Period Successor Agency: Hercules
County: Contra Costa
Current Period Requested Funding for Enforceable
Obligations (ROPS Detail)
22-23A Total
(July -
December)
22-23B Total
(January -
June)
ROPS 22-23
Total
A Enforceable Obligations Funded as Follows (B+C+D) $ - $ - $ - B Bond Proceeds - - -
C Reserve Balance - - -
D Other Funds - - -
E Redevelopment Property Tax Trust Fund (RPTTF) (F+G) $ 7,314,673 $ 4,759,863 $ 12,074,536 F RPTTF 7,189,673 4,634,863 11,824,536
G Administrative RPTTF 125,000 125,000 250,000
H Current Period Enforceable Obligations (A+E) $ 7,314,673 $ 4,759,863 $ 12,074,536 Certification of Oversight Board Chairman:
Name Title
Pursuant to Section 34177 (o) of the Health and Safety
code, I hereby certify that the above is a true and
accurate Recognized Obligation Payment Schedule for
the above named successor agency. /s/
Signature Date
102
Hercules
Recognized Obligation Payment Schedule (ROPS 22-23) - ROPS Detail July 1, 2022 through June 30, 2023
A B C D E F G H I J K O P Q U V W
Item
# Project Name Obligation
Type
Agreement
Execution
Date
Agreement
Termination
Date
Payee Description Project
Area
Total
Outstanding
Obligation
Retired ROPS
22-23 Total
ROPS 22-23A (Jul -
Dec)
22-23A
Total
ROPS 22-23B (Jan -
Jun)
22-23B
Total Fund Sources Fund Sources
RPTTF Admin
RPTTF RPTTF Admin
RPTTF
$293,949,783 $12,074,536 $7,189,673 $125,000 $7,314,673 $4,634,863 $125,000 $4,759,863 1 2005 Tax Allocation Bonds Bonds Issued
On or Before
12/31/10
08/05/
2005
08/05/2036 Bank of
New York
Bonds issued to fund non-housing
projects
All 39,082,519 N $3,135,357 2,456,694 - $2,456,694 678,663 - $678,663 2 2007 Tax Allocation Bonds Bonds Issued
On or Before
12/31/10
12/20/
2007
12/20/2044 Bank of
New York
Bonds issued to fund non-housing
projects
All 74,665,063 N $3,310,794 2,239,647 - $2,239,647 1,071,147 - $1,071,147 3 2007 Tax Allocation Bonds
Housing(A)
Bonds Issued
On or Before
12/31/10
07/26/
2007
07/26/2034 Bank of
New York
Affordable Housing Bonds All 11,923,428 N $1,002,244 758,622 - $758,622 243,622 - $243,622 4 2007 Tax Allocation Bonds
Housing(B)
Bonds Issued
On or Before
12/31/10
07/26/
2007
07/26/2034 Bank of
New York
Affordable Housing Bonds All 8,840,840 N $738,650 584,050 - $584,050 154,600 - $154,600 5 Catellus/Hercules LLC OPA/DDA/
Construction
01/01/
2009
02/15/2044 Catellus Settlement Agreement All 55,232,434 N $2,249,660 1,079,660 - $1,079,660 1,170,000 - $1,170,000 10 OPA (Owner Participation
Agreement)
OPA/DDA/
Construction
11/15/
1996
11/15/2041 Hercules
Senior
Housing/
Bridge
OPA for Senior Housing All 2,730,000 N $130,000 65,000 - $65,000 65,000 - $65,000 12 Lease of Commercial
Space
Business
Incentive
Agreements
04/05/
2002
07/01/2017 Emmerich Rent for commercial space All - Y $- - - $- - - $- 13 Lease of Commercial
Space
Business
Incentive
Agreements
10/01/
2007
09/20/2012 Montoya Rent for commercial space All - Y $- - - $- - - $- 16 Co-operation Agreement:
Loan Repayment
Agreement for Cash
Advances
Miscellaneous 02/09/
1983
12/31/2099 City of
Hercules
Hercules Resolution 83-18 dated
02/09/1983
All 50,496,029 N $- - - $- - - $-
20 Bank and Trustee Fees Fees 08/01/
2005
12/31/2044 Various Bank and trustee fees for
Redevelopment bond and bank
accounts
All 126,000 N $6,000 6,000 - $6,000 - - $-
21 SERAF SERAF/ERAF 07/01/
2009
06/30/2011 State of
California
NONE All 6,020,951 N $- - - $- - - $-
22 Administrative Costs Admin Costs 07/01/ 06/30/2023 Various NONE All 5,750,000 N $250,000 - 125,000 $125,000 - 125,000 $125,000 103
A B C D E F G H I J K O P Q U V W
Item
# Project Name Obligation
Type
Agreement
Execution
Date
Agreement
Termination
Date
Payee Description Project
Area
Total
Outstanding
Obligation
Retired ROPS
22-23 Total
ROPS 22-23A (Jul -
Dec)
22-23A
Total
ROPS 22-23B (Jan -
Jun)
22-23B
Total Fund Sources Fund Sources
RPTTF Admin
RPTTF RPTTF Admin
RPTTF
2022
25 2005 Tax Allocation Bonds Reserves 08/05/
2005
08/05/2036 AMBAC
Surety
Bond
Bonds issued to fund non-housing
projects
All - N $- - - $- - - $-
26 2007 Tax Allocation Bonds Reserves 12/20/
2007
12/20/2044 AMBAC
Surety
Bond
Bonds issued to fund non-housing
projects
All - N $- - - $- - - $-
27 2007 Tax Allocation Bonds
Housing (A)
Reserves 07/26/
2007
07/26/2034 Assured
Guaranty
Affordable Housing Bonds All - N $- - - $- - - $-
28 2007 Tax Allocation Bonds
Housing (B)
Reserves 07/26/
2007
07/26/2034 Assured
Guaranty
Affordable Housing Bonds All - N $- - - $-
- - $-
31 Debt Service Reserve Reserves 08/05/
2005
08/05/2036 Bank of
New York
Retain reserve for anticipated
shortfall for bond debt service in
the next six-month ROPS period
39,082,519 N $1,251,831 - - $- 1,251,831 - $1,251,831
104
Hercules
Recognized Obligation Payment Schedule (ROPS 22-23) - Report of Cash Balances July 1, 2019 through June 30, 2020
(Report Amounts in Whole Dollars)
Pursuant to Health and Safety Code section 34177 (l), Redevelopment Property Tax Trust Fund (RPTTF) may be listed as a source of payment on the ROPS, but only to the extent no other funding source is available or when payment from property tax revenues is required by an enforceable obligation.
A B C D E F G H
ROPS 19-20 Cash Balances
(07/01/19 - 06/30/20)
Fund Sources
Comments
Bond Proceeds Reserve Balance Other Funds RPTTF
Bonds issued
on or before
12/31/10
Bonds issued
on or after
01/01/11
Prior ROPS
RPTTF and
Reserve
Balances retained
for future
period(s)
Rent, grants,
interest, etc.
Non-Admin
and Admin
1 Beginning Available Cash Balance (Actual 07/01/19)
RPTTF amount should exclude "A" period distribution
amount.
8,796,136 156,279 14,283 130,520 E: $156,279 committed to ROPS 19-20 obligations. F: Bond interest applied to ROPS
18-19 debt service G: PPA 16-17 reserved for
ROPS 19-20 ($130,520)
2 Revenue/Income (Actual 06/30/20)
RPTTF amount should tie to the ROPS 19-20 total
distribution from the County Auditor-Controller
9,449 9,182,745 F: Bond interest applied to reduce bond debt service payment
3 Expenditures for ROPS 19-20 Enforceable Obligations
(Actual 06/30/20)
156,279 9,313,265
4 Retention of Available Cash Balance (Actual 06/30/20) RPTTF amount retained should only include the amounts
distributed as reserve for future period(s)
8,796,136 C: Bond reserve funds.
5 ROPS 19-20 RPTTF Prior Period Adjustment
RPTTF amount should tie to the Agency's ROPS 19-20 PPA
form submitted to the CAC
No entry required
6 Ending Actual Available Cash Balance (06/30/20)
C to F = (1 + 2 - 3 - 4), G = (1 + 2 - 3 - 4 - 5)
$- $- $- $23,732 $-
105
Hercules
Recognized Obligation Payment Schedule (ROPS 22-23) - Notes July 1, 2022 through June 30, 2023
Item # Notes/Comments
1 2
3 4
5 10
12 13
16 20
21 22
25 26
27 28
31 106
STAFF REPORT TO THE BOARD OF DIRECTORS OF THE SUCCESSOR AGENCY
TO THE HERCULES REDEVELOPMENT AGENCY
DATE: Regular Meeting of January 11, 2022
TO: Board of Directors of the Successor Agency to the Hercules Redevelopment Agency
VIA: Dante Hall, Executive Director/City Manager
SUBMITTED BY: Edwin Gato, Finance Director
SUBJECT: Approval of Successor Agency to the Hercules Redevelopment Agency 2022 Tax Allocation Refunding Bonds and Related Actions
RECOMMENDED ACTION:
Adopt a Resolution of the Successor Agency to the Hercules Redevelopment Agency Authorizing the Issuance and Sale of Tax Allocation Refunding Bonds in an Amount of Not to Exceed $98 million, and Approving the Form of an Indenture of Trust, the Form of Escrow Agreement, a Form of Bond Purchase Agreement, a Form of Continuing Disclosure Certificate, and Authorizing Certain other Actions in Connection Therewith.
FISCAL IMPACT OF RECOMMENDATION:
As illustrated in the Municipal Advisor’s Savings Memorandum attached hereto as Attachment 3, the issuance of Successor Agency to the Hercules Redevelopment Agenc y 2022 Tax Allocation Refunding Bonds (the “2022 Bonds”) is estimated to result in debt service savings of approximately $25.1 million and Net Present Value savings of approximately $17.8 million, or 19.6% of refunded par. Savings would be distributed among various taxing entities. Final savings achieved from the refunding will not be determined until the sale of the 2022 Bonds (currently estimated to be in April 2022).
107
In accordance with California Government Code Section 5852.1, Good Faith Estimates regarding certain financial aspects of the proposed 2022 Bonds are provided in Attachment 1. These estimates are based on market conditions as of December 21, 2021, as prepared by Stifel, Nicolaus & Company, Incorporated, as Underwriter, and reviewed by Urban Futures, Inc., as Municipal Advisor.
Additionally, these estimates are based on a proportional savings structure among other assumptions; the Successor Agency may select an alternative structure for the 2022 Bonds and other assumptions may be adjusted, which would change the results. Staff will update the B oard on the proposed structure when we return with a final form of the Preliminary Official Statement for Board approval.
DISCUSSION:
Background
The Former Agency previously issued four series of Hercules Merged Project Area Tax Allocation Bonds (the “Prior Obligations”). As summarized in the table below, $90. 65 million of the Prior Obligations remain outstanding, all of which are callable on any date.
Health and Safety Code Section 34177.5(a)(1) authorizes successor agencies to refinance outstanding debt obligations to produce debt service savings. A successor agency is generally not permitted to issue bonds that would increase the overall indebtedness of the successor agency or provide additional proceeds to be expended, but it can issue bonds to refund prior debt obligations and effectuate debt service savings.
On October 26, 2021, the Board of Directors of the Successor Agency directed staff to proceed with the actions necessary to issue the 2022 Bonds to refinance the Successor Agency’s Prior Obligations to achieve debt service savings. If the Board approves the proposed Resolution authorizing the issuance of the 2022 Bonds, the proposed refunding bond transaction will then be presented to the Contra Costa County Countywide Oversight Board on January 24, 2022. If approved by the Oversight Board, the transaction will be submitted to the California Department of Finance (“DOF”) for approval shortly thereafter. DOF has up to 65 days to review the transaction. Because the impact of the refunding would be to reduce the interest costs associated with the Prior Obligations, it is anticipated that DOF will not object to this action.
While awaiting DOF approval, the Successor Agency’s financing team will continue preparation of the financing. This includes: (i) preparation of a Preliminary Official Statement (POS), (ii) requesting subordination of statutory and negotiated pass -through payments from th e various taxing agencies, (iii) meeting with one or more rating agencies to obtain a rating on the bonds, (iv) working with bond insurers to obtain bond insurance and a debt service reserve account insurance Bond Issue Original Par
Outstanding
Par
Final
Maturity
Average
Coupon
TABs, Series 2005 56,260,000 29,115,000 8/1/2035 4.96% TABs, Series 2007 A 60,555,000 46,405,000 8/1/2042 4.74% Housing TABs, Series 2007A (Taxable) 13,130,000 8,455,000 8/1/2033 6.12% Housing TABs, Series 2007B 12,760,000 6,675,000 8/1/2033 4.94% 142,705,000$ 90,650,000$ 4.88%
Outstanding Successor Agency Tax Allocation Bonds
108
policy for the refunding bonds, and (v) seeking final approval of the POS from the Successor Agency Board in February or March 2022.
Documents to be Approved
The proposed Resolution approves documents and actions needed to authorize the issuance and sale of the 2022 Bonds, including the following su bstantially final form financing documents together with any changes or additions deemed advisable and approved by any Authorized Officer. At this time, it is anticipated that the 2022 Bonds will be sold through a negotiated sale; however, the Resolution also allows for the 2022 Bonds to be sold on a private placement basis.
Indenture of Trust between the Successor Agency and the Trustee (Bank of New York Mellon Trust Company, N.A), which sets forth the material terms and provisions relating to the 2022 Bonds and whereby the Trustee agrees to certain rights and duties related to the 2022 Bonds.
Form of Escrow Agreement between the Successor Agency and the Escrow Agent (Bank of New York Mellon Trust Company, N.A.), containing terms by which the Escrow Agent will hold the 2022 Bond proceeds on behalf of the owners of the Prior Obligations to pay and discharge these Bonds on the redemption date and give proper notice to the owners.
Bond Purchase Agreement between the Successor Agency and the Underwriter (Stifel, Nicolaus & Company, Inc.), pursuant to terms and provisions of which the 2022 Bonds will be sold with a negotiated method of sale, such terms and provisions including an underwriter’s discount not to exceed 0.95% of the principal amount of the 2022 Bonds.
Continuing Disclosure Certificate delivered by the Successor Agency for the benefit of owners of the 2022 Bonds and in order to assist the Underwriter in complying with Rule 15c2- 12(b)(5) adopted by the Securities and Exchange Commission. This document describes various annual and period reporting and disclosure obligations of the Successor Agency, as required by federal securities laws.
ATTACHMENTS:
1. Good Faith Estimates
2. Resolution No. 22-___ of the Successor Agency to the Hercules Redevelopment Agency
3. Municipal Advisor’s Savings Memorandum
4. Indenture of Trust
5. Form of Escrow Agreement
6. Bond Purchase Agreement
7. Continuing Disclosure Certificate
109
GOOD FAITH ESTIMATES
The good faith estimates set forth herein are provided with respect to the 2022 Bonds in accordance with California Government Code Section 5852.1. Such good faith estimates have been provided to the Agency by Urban Futures, Inc. as municipal advisor to the Agency (the “Municipal Advisor”), each with respect to the 2022 Bonds , and are based on market conditions as of December 21, 2021.
Principal Amount. The Municipal Advisor has informed the Agency that, based on the Agency’s financing plan and current market conditions, its good faith estimate of the aggregate principal amount of the 2022 Bonds to be sold is $78,910,000. (the “Estimated Principal Amount”).
True Interest Cost of the Bonds. The Municipal Advisor has informed the Agency that, assuming that the Estimated Principal Amount of the 2022 Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the true interest cost of the 2022 Bonds , which means the rate necessary to discount the amounts payable on the respective principal and interest payment dates to the purchase price received for the 2022 Bonds, is 2.55%.
Finance Charge of the Bonds. The Municipal Advisor has informed the Agency that, assuming that the Estimated Principal Amount of the 2022 Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the finance charge for the 2022 Bonds , which means the sum of all fees and charges paid to third parties (or costs associated with the 2022 Bonds), is $920,463.
Amount of Proceeds to be Received . The Municipal Advisor has informed the Agency that, assuming that the Estimated Principal Amount of the 2022 Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the amount of proceeds expected to be received by the Agency for sale of the 2022 Bonds , less the finance charge of the 2022 Bonds, as estimated above, and any reserve fund funded with proceeds of the 2022 Bonds, is $82,010,974.
Total Payment Amount. The Municipal Advisor has informed the Agency that, assuming that the Estimated Principal Amount of the 2022 Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the t otal payment amount, which means the sum total of all payments the Agency will make to pay debt service on the 2022 Bonds, plus the finance charge for the 2022 Bonds, as described above, not paid with the proceeds of the 2022 Bonds, calculated to the final maturity of the 2022 Bonds, is $109,391,088.
The foregoing estimates constitute good faith estimates only. The actual principal amount of the 2022 Bonds issued and sold, the true interest cost thereof, the finance charges thereof, the amount of proceeds received therefrom and total payment amount with respect thereto may differ from such good faith estimates due to (a) the actual date of the sale of the 2022 Bonds being different than the date assumed for purposes of such estimates, (b) the actual principa l amount of 2022 Bonds sold being different from the Estimated Principal Amount, (c) the actual amortization of the 2022 Bonds being different than the amortization assumed for purposes of such estimates, 110
(d) the actual market interest rates at the time of sale of the 2022 Bonds being different than those estimated for purposes of such estimates, (e) other market conditions, or (f) alterations in the Agency’s financing plan, or a combination of such factors. The actual date of sale of the 2022 Bonds and the actual principal amount of 2022 Bonds sold will be determined by the Agency based on the timing of the need for proceeds of the 2022 Bonds and other factors. The actual interest rates borne by the 2022 Bonds will depend on market interest rates at the time of sale thereof. The actual amortization of the 2022 Bonds will also depend, in part, on market interest rates at the time of sale thereof. Market interest rates are affected by economic and other factors beyond the control of the Agency.
111
4869-5956-7874v4/200861-0005
RESOLUTION NO. _________
RESOLUTION OF THE SUCCESSOR AGENCY TO THE
HERCULES REDEVELOPMENT AGENCY AUTHORIZING
THE ISSUANCE AND SALE OF TAX ALLOCATION
REFUNDING BONDS IN AN AMOUNT OF NOT TO EXCEED
$98,000,000, AND APPROVING THE FORM OF AN
INDENTURE OF TRUST , A FORM OF ESCROW
AGREEMENT, A FORM OF BOND PURCHASE
AGREEMENT, A FORM OF CONTINUING DISCLOSURE
CERTIFICATE, AND AUTHORIZING CERTAIN OTHER
ACTIONS IN CONNECTION THEREWITH
WHEREAS, the Hercules Redevelopment Agency (the “Prior Agency”) was a public body, corporate and politic, duly created, established and authorized to transact business and exercise its powers under and pursuant to the provisions of the Community Redevelopment Law (Part 1 of Division 24 of the Health and Safety Code of the State of Califor nia) (the “Law”), and the powers of the Prior Agency included the power to issue bonds for any of its corporate purposes; and WHEREAS, an Amended and Restated Redevelopment Plan for the Merged Project Area was adopted and approved, and amended from time to time, in compliance with all requirements of the Law, and all requirements of law for and precedent to the adoption and approval of the Redevelopment Plan, as amended, have been duly complied with; and
WHEREAS, on June 28, 2011, the California Legislature adopted ABx1 26 (the “Dissolution Act”) and ABx1 27 (the “Opt-in Bill”); and
WHEREAS, the California Supreme Court subsequently upheld the provisions of the Dissolution Act and invalidated the Opt -in Bill, resulting in the dissolution of the Prior Agency as of February 1, 2012; and
WHEREAS, the Prior Agency ’s redevelopment powers, assets and obligations w ere transferred on February 1, 2012 to the Successor Agency to the Hercules Redevelopment Agency (the “Successor Agency”); and
WHEREAS, on or about June 27, 2012, AB1484 was adopted as a trailer bill in connection with the 2012-13 California Budget; and
WHEREAS, the Prior Agency issued (i) the Hercules Redevelopment Agency, Hercules Merged Project Area, Tax Allocation Bonds, Series 2005; (ii) the Hercules Redevelopment Agency, Hercules Merged Project Area, Tax Allocation Bonds, 2007 Series A; (iii) the Hercules Redevelopment Agency, Hercules Merged Project Area, Housing Tax Allocation Bonds, 2007 Series A (Taxable); and (iv) the Hercules Redevelopment Agenc y, Hercules Merged Project Area, Housing Tax Allocation Bonds, 2007 Series B (collectively, the “Prior Obligations”); and WHEREAS, California Health and Safety Code Section 34177.5(a)(1) authorizes successor agencies to refund outstanding bonds or other indebtedness provided that: (i) the total interest cost to maturity on the refunding bonds or other indebtedness, plus the principal amount of the refunding 112
2 4869-5956-7874v4/200861-0005
bonds or other indebtedness, does not exceed the total remaining interest cost to maturity on the bonds or other indebtedness to be refunded, plus the remaining principal of the bonds or other indebtedness to be refunded; and (ii) the principal amount of the refunding bonds or other indebtedness does not exceed the amount required to defease the bonds or other indebtedness to be refunded, to establish customary debt service reserves and to pay related costs of issuance; and WHEREAS, the Successor Agency now desires to authorize and approve the issuance of tax allocation refunding bonds (the “ 2022 Bonds”) in an aggregate principal amount sufficient to refund all or a portion of the Prior Obligations, and to irrevocably set aside a portion of the proceeds of such 2022 Bonds in one or more separate segregated trust funds which will be used to refund the outstanding Prior Obligations being refunded, to pay costs in connection with the issuance of the 2022 Bonds and to make certain other deposits as required by the Indenture (as defined below); and WHEREAS, the 2022 Bonds shall be secured by a pledge of property tax revenues authorized by California Health and Safety Code Section 34177.5(a) and (g), pursuant to the provisions of Article 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code (the “Bond Law”); and
WHEREAS, the Successor Agency wishes at this time to approve matters relating to the issuance and sale of the 2022 Bonds; and
WHEREAS, good faith estimates of certain information relating to the 2022 Bonds is set forth in the staff report submitted to the Successor Agency herewith as required by California Government Code Section 5852.1; such estimates were provided by Urban Futures Inc., the Successor Agency’s Municipal Advisor; and
NOW, THEREFORE, THE SUCCESSOR AGENCY TO THE HERCULES
REDEVELOPMENT AGENCY, DOES HEREBY RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS:
Section 1. Approval of Bonds. Subject to the provisions of the Indenture referred to in Section 2 hereof, the issuance of the 2022 Bonds, in one or more series, and from time to time, in an aggregate principal amount of not to exceed $98,000,000, or such lesser amount as is sufficient to refund all or a portion of the Prior Obligations for the purpose of achieving debt service savings in accordance with Health & Safety Code Section 34177.5(a)(1) and the pledge of property tax revenues to the 2022 Bonds pursuant to the Indenture approved by Section 2 of this Resolution (as authorized by California Health and Safety Code Section 34177.5(a) and (g)) is hereby approved on the terms and conditions set forth in, and subject to the limitations specified in, the Indenture. The 2022 Bonds will be dated, will bear interest at the rates, will mature on the dates, will be issued in the form, will be subject to redemption, and will be as otherwise provided in the Indenture, as the same will be completed as provided in this Resolution. The proceeds of the sale of the 2022 Bonds shall be applied as provided in the Indenture.
The 2022 Bonds may be issued as a single issue, or from time to time, in separate series of taxable or tax-exempt bonds, as the Successor Agency shall determine. The approval of the issuance of the 2022 Bonds by the Successor Agency and the Contra Costa County Countywide Oversight Board (the “Oversight Board”) shall constitute the approval of each and every separate series of 2022 Bonds and the sale of the 2022 Bonds at a public or private sale , without the need for any further approval from the Oversight Board.
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3 4869-5956-7874v4/200861-0005
Section 2. Approval of Indenture . The form of the Indenture of Trust (the “I ndenture”) presented herewith, providing for the issuance of the 2022 Bonds, is hereby approved. The Chair, the Executive Director, the Finance Director, the Secretary any member of the governing board of the Successor Agency or their respective written designee (each an “Authorized Officer” and collectively, the “Authorized Officers”) are, and each of them is, hereby authorized and directed, for and in the name of the Successor Agency, to execute and deliver the Indenture, in substantially said form, with such changes therein as the Authorized Officer executing the same may require or approve , such approval to be conclusively evidenced by the execution and delivery thereof. If the 2022 Bonds are to be sold in separate series at different times, each of th e Authorized Officers is hereby authorized and directed in the name of the Successor Agency to execute any supplement to the Indenture to provide for the issuance of such series of 2022 Bonds consistent with the terms of the Resolution.
Each of the Authorized Officers is hereby authorized and directed to execute and countersign each of the 2022 Bonds on behalf of the Successor Agency, either manually or in facsimile, and such signing as herein provided shall be a sufficient and binding execution of the 2022 Bonds on behalf of the Successor Agency. In case either of such officers whose signature appears on the 2022 Bonds shall cease to be such officer before the delivery of the 2022 Bonds, such signature shall nevertheless be valid and sufficient for all purposes as though such officer had remained in office until the delivery of the 2022 Bonds.
Section 3. Approval of Escrow Agreements . The form of the Escrow Agreement s presented herewith is hereby approved. The Authorized Officers are, and each of them is, hereby authorized and directed, for and in the name of the Successor Agency, to execute and deliver one or more Escrow Agreements for each of the Prior Obligations in substantially said form, with such changes therein as the Authorized Officer executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof.
Section 4. Approval of Continuing Disclosure Certificate . The form of the Continuing Disclosure Certificate presented herewith is hereby approved. The Authorized Officers are, and each of them is, hereby authorized and directed, for and in the name of the Successor Agency, to execute and deliver a Continuing Disclosure Certificate in substantially said form, with such changes therein as the Authorized Officer executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof.
Section 5. Approval of Bond Purchase Agreement.
(a) The form of the Bond Purchase Agreement (the “Bond Purchase Agreement”) between the Successor Agency and Stifel, Nicolaus & Company, Incorporated , as Underwriter, in the form presented herewith is hereby approved. The Authorized Officers are, and each of them is, hereby authorized and directed, for and in the name of the Successor Agency, to execute and deliver the Bond Purchase Agreement in substantially said form, with such changes therein as the Authorized Officer executing the same may require or appro ve, such approval to be conclusively evidenced by the execution and delivery thereof; provided, however, that the Bond Purchase Agreement shall be signed only if the terms of the Bond Purchase Agreement are such that (i) the total interest cost to maturity on the 2022 Bonds plus the principal amount of the 2022 Bonds will not exceed the total remaining interest cost to maturity on the Prior Obligations plus the principal amount of the Prior Obligations, (ii) the principal amount of the 2022 Bonds will not e xceed the amount required to defease the Prior Obligations, to establish a customary debt service reserve fund, and to pay related costs of issuance, 114
4 4869-5956-7874v4/200861-0005
and (iii) the aggregate Underwriter’s discount (not including any original issue discount paid by the Underwriter) shall not exceed 0.95% of the aggregate principal amount of the 2022 Bonds. (b) As an alternative to the sale of the 2022 Bonds through a public offering authorized in paragraph (a), the 2022 Bonds may be sold on a private placement basis through Stif el, Nicolaus & Company, Incorporated, acting as private placement agent (the “Private Placement Agent”), if a private placement of the 2022 Bonds will produce lower interest rates (and therefore greater savings) than are available through a public offering of the 2022 Bonds, or if a private placement is otherwise preferable and/or more appropriate to a public offering of the 2022 Bonds, in the opinion of, and upon recommendation of, the Municipal Advisor, which recommendation is agreed to by the Executive Director or Finance Director of the Successor Agency, so long as the interest rate savings specified in paragraph (a) are achieved through said private placement of the 2022 Bonds, and so long as the compensation to the Private Placement Agent through a pri vate placement of the Bonds does not exceed the amount approved by the Executive Director or Finance Director of the Successor Agency.
Section 6. Debt Management Policy . The Debt Issuance and Management Policy adopted by the City Council of the City of Hercules is hereby adopted by the Board of Directors of the Successor Agency.
Section 7. Miscellaneous. Each of the Authorized Officers and other appropriate officers of the Successor Agency, acting alone, is authorized and directed, jointly and severally, to do any and all things and to execute and deliver any and all documents and contracts that they may deem necessary or advisable in order to consummate the sale, execution and delivery of the 2022 Bonds and otherwise to carry out, give effect to and comply with the terms and intent of this Resolution, the 2022 Bonds, the Indenture, the Continuing Disclosure Certificate , the Bond Purchase Agreement and the Escrow Agreement, each in order to facilitate the issuance of the 2022 Bonds and otherwise to carry out, give effect to and comply with the terms and intent of this Resolution, including, without limitation, to amend any of the legal documents entered in connection with the Prior Obligations in order to effectuate the def easance and refunding of such Prior Obligations , to execute irrevocable refunding instructions with respect to the Prior Obligations, to secure municipal bond insurance on the 2022 Bonds and/or a reserve surety or reserve policy to fund any reserve account or fund established for the 2022 Bonds, if available (which may include entering into a mutual insurance agreement(s) therefor), to request subordination of any amounts required to be paid to an affected taxing entity to any or all of the 2022 Bonds, to negotiate and execute a private placement agreement with the Private Placement Agent, and to negotiate and execute an agreement or instructions for the County Auditor-Controller to directly pay debt service on the 2022 Bonds from the Successor Agency’s Rede velopment Property Tax Trust Fund (i.e., irrevocable instructions to intercept property tax revenues or a custody agreement), as the Authorized Officer may require or approve, in consultation with Bond Counsel and the Successor Agency’s Municipal Advisor, and any such actions heretofore taken by such officers in connection therewith are hereby ratified, confirmed and approved.
Section 8. Appointment of Professionals . Stradling Yocca Carlson & Rauth, A Professional Corporation, is hereby approved and appointed as Bo nd Counsel and Disclosure Counsel , Urban Futures Inc. is hereby approved and appointed as Municipal Advisor , RSG, Inc. is hereby approved and appointed Fiscal Consultant, and The Bank of New York Mellon Trust Company, N.A. is hereby appointed as Trustee and Escrow Bank, each to provide such services and any other related services as may be required to issue the 2022 Bonds and to defease and/or refund the Prior Obligations. 115
5 4869-5956-7874v4/200861-0005
Section 9. Severability. If any provision of this Resolution or the application of any such provision to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of this Resolution that can be given effect without the invalid provision or application, and to this end the provisions of this Reso lution are severable. The Successor Agency declares that the Successor Agency would have adopted this Resolution irrespective of the invalidity of any particular portion of this Resolution.
Section 10. Effective Date. This Resolution shall take effect immediately upon its adoption by the governing board of the Successor Agency, and the Secretary shall certify the vote adopting this resolution.
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PASSED, APPROVED, AND ADOPTED on January 11, 2022.
Chris Kelley, Chair
ATTEST:
________________________________
Lori Martin
Secretary
STATE OF CALIFORNIA )
COUNTY OF CONTRA COSTA )
CITY OF HERCULES )
I, LORI MARTIN, Secretary of the Successor Agency to the Hercules Redevelopment Agency, DO HEREBY CERTIFY that the foregoing Resolution No. _____ was duly passed and adopted by the Board of Directors of the Successor Agency to the Hercules Redevelopment Agency at a regular meeting held on the 11th day of January, 2022 by the following roll call vote, to wit:
AYES: DIRECTORS:
NOES: DIRECTORS:
ABSENT: DIRECTORS:
IN WITNESS WHEREOF, I have hereby set my hand and affixed the seal of the City of Hercules this _____day of _____, 20__.
____________________________________
LORI MARTIN, SECRETARY
117
1 SAVINGS MEMORANDUM
TO: Successor Agency to the Hercules Redevelopment Agency
FROM: Urban Futures, Inc.
Wing-See Fox, Managing Director
DATE: January 11, 2022
RE: Independent Municipal Advisor’s Report: Debt Service Savings Analysis for the Successor Agency to the Hercules Redevelopment Agency 2022 Tax Allocation Refunding Bonds _____________________________________________________________________________________
Background
The Successor Agency to the Hercules Redevelopment Agency (the “Agency”) is authorized under Section 34177.5 of the California Health and Safety Code to issue refunding tax allocation bonds and other indebtedness for economic savings within the parameters set forth in Section 34177.5(a)(1) of the California Health and Safety Code (the “Savings Parameters”). In addition, Section 34177 .5(h) of the California Health and Safety Code provides, in relevant part, that the Agency “ …shall make use of an independent financial advisor in developing financing proposals and shall make the work products of the financial advisor available to the Department of Finance at its request .” Urban Futures, Inc., has been retained by the Agency to serve as its independent municipal advisor to determine compliance with the Savings Parameters for purposes of the incurrence by the Agency of its 2022 Tax Allocation Refunding Bonds (the “2022 Bonds”).
The Agency will issue the 2022 Bonds to refund the following obligations of the former Redevelopment Agency: (i) Hercules Merged Project Area, Tax Allocation Bonds, Series 2005 (the “2005 Bonds”) ; (ii) Hercules Merged Project Area, Tax Allocation Bonds, 2007 Series A (the “2007A Bonds”) ; (iii) Hercules Merged Project Area, Housing Tax Allocation Bonds, 2007 Series A (Taxable) (the “Taxable 2007A Housing Bonds”); and (iv) the Hercules Merged Project Area, Housing Tax Allocation Bonds, 2007 Series B (the “2007B Housing Bonds”) (collectively, the “Prior Obligations”). The Agency has selected Stifel, Nicolaus & Company, Incorporated (the “Underwriter”) to structure and negotiate the refunding of the Prior Obligations. The financing goal is to maximize economic savings by reducing total debt servi ce, and t he savings generated from this refunding are anticipated to result in higher future property tax distributions to the taxing entities. This report may be used in presentations to the Agency Board and Oversight Board, but actual savings will be final only after the pricing of the 2022 Bonds.
Plan of Refunding
Based on market conditions as of December 21, 2021, t he Underwriter estimates the refunding of the Prior Obligations will achieve combined debt service savings of approximately $25.1 million and Net Present Value savings of approximately $17.8 million, or 19.6% of refunded par, as shown in Tables 2 and
3. The Underwriter’s estimates include the following key assumptions: (i) all of the outsta nding Prior Obligations are refunded, (ii) an underlying rating of “BBB“ is assigned by S&P to the 20 22 Bonds, (iii) a cash funded reserve fund, (iv) a public market negotiated sale of the 2022 Bonds, and (v) 2022 Bonds are structured to achieve proportional savings. The Successor Agency may select an alternative structure for the 2022 Bonds and other assumptions may be adjusted, which would change the refunding results. 118
2 Refunding Results
Table 1 below shows the estimated sources and uses for the 2022 Bonds.
Tabl
es 2 and 3 below show estimated Cash Flow and Net Present Value savings results assuming market conditions as of December 21, 2021. Additional information can be found in the attached Refunding Analysis.
Sources: 2005 Bonds 2007A Bonds
Taxable 2007A
Housing Bonds
2007B Housing
Bonds Total
Par Amount 25,130,000$ 40,185,000$ 8,290,000$ 5,305,000$ 78,910,000$ Premium 3,495,790 6,428,948 719,917 10,644,655 28,625,790$ 46,613,948$ 8,290,000$ 6,024,917$ 89,554,655$ Prior Bonds Available Funds 3,312,642 4,271,602 1,110,292 1,253,497 9,948,033 3,312,642$ 4,271,602$ 1,110,292$ 1,253,497$ 9,948,033$ Total Sources of Funds 31,938,433$ 50,885,550$ 9,400,292$ 7,278,414$ 99,502,688$ Uses: 2005 Bonds 2007A Bonds
Taxable 2007A
Housing Bonds 2007B Housing Bonds Total
Refunding Escrow Deposit 29,535,988$ 47,046,461$ 8,605,863$ 6,770,696$ 91,959,007$ Debt Service Reserve Fund 2,109,257$ 3,372,880$ 695,811$ 445,269$ 6,623,218$ Costs of Issuance 293,188$ 466,209$ 98,618$ 62,449$ 920,463$ Total Uses of Funds 31,938,433$ 50,885,550$ 9,400,292$ 7,278,414$ 99,502,688$ Table 1: Sources and Uses of Funds
2005 Bonds 2007A Bonds
Taxable 2007A
Housing Bonds
2007B Housing
Bonds Total
8/1/2022 621$ 2,169$ 1,487$ 3,937$ 8,215$ 8/1/2023 617,588 626,781 197,426 196,050 1,637,845
8/1/2024 619,650 618,119 193,574 198,925 1,630,268
8/1/2025 620,013 614,019 195,274 196,188 1,625,493
8/1/2026 618,625 609,231 196,657 198,088 1,622,601
8/1/2027 620,475 605,119 193,034 199,375 1,618,002
8/1/2028 620,300 595,719 193,887 200,050 1,609,956
8/1/2029 618,063 593,616 194,372 196,205 1,602,255
8/1/2030 618,738 585,954 194,338 197,010 1,596,039
8/1/2031 617,063 582,921 192,874 197,225 1,590,083
8/1/2032 618,013 574,306 194,875 195,550 1,582,744
8/1/2033 616,300 570,344 195,607 198,225 1,580,476
8/1/2034 156,888 1,006,519 1,163,406
8/1/2035 156,275 999,550 1,155,825
8/1/2036 1,155,550 1,155,550
8/1/2037 659,281 659,281
8/1/2038 655,938 655,938
8/1/2039 655,613 655,613
8/1/2040 658,013 658,013
8/1/2041 657,913 657,913
8/1/2042 655,250 655,250
7,118,608$ 13,681,923$ 2,143,403$ 2,176,827$ 25,120,762$ Table 2: Cash Flow Savings
119
3 Proposed Refunding Complies With State Law
Based on the 2022 Bonds’ proposed structure and the estimated debt service savings according to numbers prepared by the Underwriter , Urban Futures, Inc., concludes that the 2022 Bonds comply with the Savings Parameters and other requirements of State Law as described below.
A. Total debt service (principal and interest) on the refunding bonds is less than total debt service on the refunded bonds (sec. 34177.5(a)(1)(A)): Section 34177.5(a)(1)(A) requires that the total interest cost to maturity on the refunding bonds or other indebtedness plus the principal amount of the refunding bonds or other indebtedness shall not exceed the total remaining interest cost to maturity on the bonds or other indebtedness to be refunded plus the remaining principal of the bonds or other indebtedness to be refunded. Table 2 shows estimated total nominal debt service savings of approximately $ 7.1 million for the 2005 Bonds , $13.7 million for the 2007A Bonds , $2.1 million for the Taxable 2007A Housing Bonds, and $2.2 million for the 2007B Housing Bonds ($25.1 million combined), calculated as (i) total debt service on the Prior Obligations, minus (ii) total debt service on the 2022 Bonds. Net Present Value savings are estimated to be approximately: $5.1 million, or 17.38% of refunded par for the 2005 Bonds, $10.1 million, or 21.80% of refunded par for the 2007A Bonds , $1.5 million, or 17.61% of refunded par for the Taxable 2007A Housing Bonds, and $1.1 million, or 1 6.75% of refunded par for the 2007B H ousing Bonds .
Combined, the Net Present Value savings are estimated to be $17.8 million, or 19.61% of refunded par.
The individual and combined Net Present Value savings satisfy the Savings Parameters in Section 34177.5(a)(1) and are well-above the 3% minimum threshold typically targeted by issuers.
B. Refunding bonds principal shall be used only for purposes of refunding outstanding Agency obligations (sec. 34177.5(a) (1)(B)): Section 34177.5(a)(1)(B) requires that the principal amount of the refunding bonds or other indebtedness shall not exceed the amount required to defease the refunded bonds or other indebtedness, to establish customary debt service reserves, and to pay related costs of issuance. Table 1 shows the anticipated sources and uses of funds for the 2022 Bonds and confirms that all proceeds of the 2022 Bonds will be used only to defease the Prior Obligations, to establish a debt service reserve fund, and to pay related costs of issuance . Proceeds of the 2022 Bonds will not be used for any other purposes, including new-money purposes.
C. Agency shall make diligent efforts to ensure lowest long-term cost financing is obtained, to structure refunding that does not provide for any bullets or spikes or variable rates, and shall hire an independent financial advisor (sec. 3 4177.5(h)): Section 34177.5(h) requires the Agency to make diligent efforts to ensure that the lowest long -term cost financing is obtained and that the financing not provide for any bullets or spikes or use variable rates. The Agency has retained Urban Futures, Inc., an independent financial advisor registered with the SEC and MSRB, to monitor the pricing of the 2022 Bonds. In order to 2005 Bonds 2007A Bonds
Taxable 2007A
Housing Bonds
2007B Housing
Bonds Total
PV of savings from cash flow 6,262,298$ 11,013,526$ 1,900,807$ 1,925,403$ 21,102,035$ Less: Prior funds on hand(1) (3,312,642)$ (4,271,602)$ (1,110,292)$ (1,253,497)$ (9,948,033)$ Plus: Refunding funds on hand (2) 2,110,469$ 3,372,195$ 698,111$ 446,081$ 6,626,856$ Net PV Savings 5,060,125$ 10, 114,119$ 1,488,626$ 1,117,988$ 17,780,858$ Net PV Savings as % of Refunded Par 17.38% 21.80% 17.61% 16.75% 19.61% (1) Primarily consists of reserve account releases in connection with defeasance of Prior Obligations and RPTTF available funds (2) Debt service reserve for 2022 Bonds
Table 3: Net PV Savings Summary
120
4 achieve the lowest long-term cost of financing, the financing team will explore the use of bond insurance and a surety for the 2022 Bonds, and the Agency will request subordination of pass-through payments. In accordance with Section 34177.5(h), the 2022 Bonds will not be structured to include any bullet principal maturities, debt service spikes or variable rate debt.
Issuance of the 202 2 Bonds by the Agency for the purpose of refunding the Prior Obligations is recommended to achieve debt service savings.
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5 Appendix: Refunding Analysis
122
Dec 23, 2021 10:48 am Prepared by Stifel, Nicolaus & Company, Inc (SM) Page 1
SOURCES AND USES OF FUNDS
Successor Agency to the Redevelopment Agency of the City of Hercules Tax Allocation Refunding Bonds, Series 2021
*********************************************************************** Market Conditions as of December 21, 2021 plus 25bps
Assumes 'BBB' Underlying S&P Rating, DSRF, and Proportional Refunding 2005A, 2007A, & 2007B Housing Bonds Refunded on a Tax-Exempt Basis 2007A Housing Bonds Refunded on a Taxable Basis
*********************************************************************** Dated Date 05/03/2022
Delivery Date 05/03/2022
Taxable
Refunding of Current
Current Current Housing Tax Refunding of
Refunding of Refunding of A llocation Housing Tax
Tax Allocation Tax Alloc ation Bonds, 2007 Allocation
Bonds, Series Bonds, 2007 Series A Bonds, 2007
Sources: 2005 Series A (Taxable) Series B Total
Bond Proceeds:
Par Amount 25,130,000.00 40,185,000.00 8,290,000.00 5,305,000.00 78,910,000.00 Premium 3,495,790.25 6,428,947.50 719,917.05 10,644,654.80 28,625,790.25 46,613,947.50 8,290,000.00 6,024,917.05 89,554,654.80 Other Sources of Funds:
Revenue Funds 29.04 3.97 2.20 35.21
Reserve Funds 2,812,917.05 3,813,348.03 955,982.73 1,082,585.82 8,664,833.63 RPTTF Funds on Hand 499,696.33 455,548.57 154,305.18 118,796.92 1,228,347.00 2007A Project Reimbursement Account 2,705.69 2,705.69
2007B Housing Project Fund 52,111.57 52,111.57
3,312,642.42
4,271,602.29 1,110,291.88 1,253,496.51 9,948,033.10
31,938,432.67 50,885,549.79 9,400,291.88 7,278,413.56 99,502,687.90 Taxable
Refunding of Current
Current Current Housing Tax Refunding of
Refunding of Refunding of A llocation Housing Tax
Tax Allocation Tax Alloc ation Bonds, 2007 Allocation
Bonds, Series Bonds, 2007 Series A Bonds, 2007
Uses: 2005 Series A (Taxable) Series B Total
Refunding Escrow Deposits:
Cash Deposit 29,535,988.02 47,046,460.68 8,605,862.76 6,770,695.83 91,959,007.29 Other Fund Deposits:
Debt Service Reserve Fund 2,109,256.82 3,372,880.44 695,811.34 445,268.90 6,623,217.50 Delivery Date Expenses:
Cost of Issuance 103,500.82 165,506.59 34,143.33 21,849.26 325,000.00 Underwriter's Discount 188,475.00 301,387.50 62,175.00 39,787.50 591,825.00 291,975.82
466,894.09 96,318.33 61,636.76 916,825.00
Other Uses of Funds:
Contingency 1,212.01 (685.42) 2,299.45 812.07 3,638.11
31,938,432.67 50,885,549.79 9,400,291.88 7,278,413.56 99,502,687.90 Notes:
1. Preliminary and subject to change. The City's actual results may differ, and Stifel makes no commitment to underwrite at these levels.
2. The use of the 'BBB' S&P rating is based on similar credits.
3. Interest rate assumptions are based on current market conditions and similar credits.
4. The costs of issuance and underwriter's discount are estimates for discussion purposes only.
5. Structured with cash-funded DSRF.
6. Fund balances from BNY Mellon as of December 15th
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BOND SUMMARY STATISTICS
Successor Agency to the Redevelopment Agency of the City of Hercules Tax Allocation Refunding Bonds, Series 2021
*********************************************************************** Market Conditions as of December 21, 2021 plus 25bps
Assumes 'BBB' Underlying S&P Rating, DSRF, and Proportional Refunding 2005A, 2007A, & 2007B Housing Bonds Refunded on a Tax-Exempt Basis 2007A Housing Bonds Refunded on a Taxable Basis
*********************************************************************** Dated Date 05/03/2022
Delivery Date 05/03/2022
First Coupon 08/01/2022
Last Maturity 08/01/2042
Arbitrage Yield 2.040037%
True Interest Cost (TIC) 2.546142%
Net Interest Cost (NIC) 2.792160%
All-In TIC 2.593742%
Average Coupon 4.166194%
Average Life (years) 9.272
Par Amount 78,910,000.00
Bond Proceeds 89,554,654.80
Total Interest 30,481,088.34
Net Interest 20,428,258.54
Total Debt Service 109,391,088.34
Maximum Annual Debt Service 6,623,217.50
Average Annual Debt Service 5,403,511.50
Notes:
1. Preliminary and subject to change. The City's actual results may differ, and Stifel makes no commitment to underwrite at these levels.
2. The use of the 'BBB' S&P rating is based on similar credits.
3. Interest rate assumptions are based on current market conditions and similar credits.
4. The costs of issuance and underwriter's discount are estimates for discussion purposes only.
5. Structured with cash-funded DSRF.
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SUMMARY OF REFUNDING RESULTS
Successor Agency to the Redevelopment Agency of the City of Hercules Tax Allocation Refunding Bonds, Series 2021
*********************************************************************** Market Conditions as of December 21, 2021 plus 25bps
Assumes 'BBB' Underlying S&P Rating, DSRF, and Proportional Refunding 2005A, 2007A, & 2007B Housing Bonds Refunded on a Tax-Exempt Basis 2007A Housing Bonds Refunded on a Taxable Basis
*********************************************************************** Taxable
Refunding of Current
Current Current Housing Tax Refunding of
Refunding of Tax Refunding of Tax Allocation Housing Tax Allocation Allocation Bonds, 2007 Allocation
Bonds, Series Bonds, 2007 Series A Bonds, 2007
2005 Series A (Taxable) Series B Total
Dated Date 05/03/2022 05/03/2022 05/03/2022 05/03/2022 05/03/2022 Delivery Date 05/03/2022 05/03/2022 05/03/2022 05/03/2022 05/03/2022 Arbitrage Yield 2.040037% 2.040037% 2.991593% 2.040037% 2.040037% Escrow Yield
Value of Negative Arbitrage
Bond Par Amount 25,130,000.00 40,185,000. 00 8,290,000.00 5,305,000.00 78,910,000.00 True Interest Cost 2.002946% 2.721114% 3.133599% 1.942170% 2.546142% Net Interest Cost 2.193185% 2.997863% 3.136617% 2.123052% 2.792160% Average Coupon 4.250000% 4.250000% 3.010976% 4.250000% 4.166194% Average Life 6.399 12.178 5.969 6.028 9.272
Par amount of refunded bonds 29,115,000.00 46,405,000.00 8,455,000.00 6,675,000.00 90,650,000.00 Average coupon of refunded bonds 4.955243% 4.737876% 6.124720% 4.937531% 4.881961% Average life of refunded bonds 6.653 12.598 6.443 6.317 9.652 PV of prior debt 34,639,841.68 60,491, 867.03 10,626,137.65 7,879,086.93 113,636,933.29 Net PV Savings 5,060,124.74 10,114,119. 07 1,488,626.31 1,117,987.88 17,780,858.00 Percentage savings of refunded bonds 17.379786% 21.795322% 17.606461% 16.748882% 19.614846% Notes:
1. Preliminary and subject to change. The City's actual results may differ, and Stifel makes no commitment to underwrite at these levels.
2. The use of the 'BBB' S&P rating is based on similar credits.
3. Interest rate assumptions are based on current market conditions and similar credits.
4. The costs of issuance and underwriter's discount are estimates for discussion purposes only.
5. Structured with cash-funded DSRF.
125
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BOND PRICING
Successor Agency to the Redevelopment Agency of the City of Hercules Tax Allocation Refunding Bonds, Series 2021
*********************************************************************** Market Conditions as of December 21, 2021 plus 25bps
Assumes 'BBB' Underlying S&P Rating, DSRF, and Proportional Refunding 2005A, 2007A, & 2007B Housing Bonds Refunded on a Tax-Exempt Basis 2007A Housing Bonds Refunded on a Taxable Basis
*********************************************************************** Maturity Yield to Call Call
Bond Component Date Amount Rate Yield Price Maturity Date Price Taxable Serial Bonds:
08/01/2022 705,000 1.200% 1.200% 100.000
08/01/2023 615,000 1.400% 1.400% 100.000
08/01/2024 625,000 1.760% 1.760% 100.000
08/01/2025 635,000 2.020% 2.020% 100.000
08/01/2026 645,000 2.320% 2.320% 100.000
08/01/2027 665,000 2.540% 2.540% 100.000
08/01/2028 680,000 2.790% 2.790% 100.000
08/01/2029 700,000 3.030% 3.030% 100.000
08/01/2030 720,000 3.130% 3.130% 100.000
08/01/2031 745,000 3.230% 3.230% 100.000
08/01/2032 765,000 3.380% 3.380% 100.000
08/01/2033 790,000 3.530% 3.530% 100.000
8,290,000
Tax-Exempt Serial Bonds:
08/01/2022 4,540,000 4.250% 0.620% 100.884
08/01/2023 2,995,000 4.250% 0.820% 104.237
08/01/2024 3,100,000 4.250% 1.030% 107.124
08/01/2025 3,210,000 4.250% 1.130% 109.910
08/01/2026 3,320,000 4.250% 1.300% 112.141
08/01/2027 3,435,000 4.250% 1.480% 113.926
08/01/2028 3,560,000 4.250% 1.630% 115.493
08/01/2029 3,685,000 4.250% 1.770% 116.790
08/01/2030 3,820,000 4.250% 1.830% 118.438
08/01/2031 3,955,000 4.250% 1.920% 119.647
08/01/2032 4,095,000 4.250% 2.050% 120.232
08/01/2033 4,240,000 4.250% 2.120% 119.518 C 2.273% 08/01/2032 100.000 08/01/2034 3,855,000 4.250% 2.190% 118.809 C 2.461% 08/01/2032 100.000 08/01/2035 3,990,000 4.250% 2.220% 118.506 C 2.590% 08/01/2032 100.000 08/01/2036 4,160,000 4.250% 2.240% 118.305 C 2.694% 08/01/2032 100.000 08/01/2037 2,195,000 4.250% 2.270% 118.004 C 2.792% 08/01/2032 100.000 08/01/2038 2,290,000 4.250% 2.300% 117.704 C 2.878% 08/01/2032 100.000 08/01/2039 2,390,000 4.250% 2.330% 117.405 C 2.954% 08/01/2032 100.000 08/01/2040 2,485,000 4.250% 2.360% 117.107 C 3.023% 08/01/2032 100.000 08/01/2041 2,595,000 4.250% 2.390% 116.809 C 3.085% 08/01/2032 100.000 08/01/2042 2,705,000 4.250% 2.420% 116.513 C 3.141% 08/01/2032 100.000 70,620,000
78,910,000
Dated Date 05/03/2022
Delivery Date 05/03/2022
First Coupon 08/01/2022
Par Amount 78,910,000.00
Premium 10,644,654.80
Production 89,554,654.80 113.489614%
Underwriter's Discount (591,825.00) (0.750000%)
Purchase Price 88,962,829.80 112.739614%
Accrued Interest
Net Proceeds 88,962,829.80
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BOND PRICING
Successor Agency to the Redevelopment Agency of the City of Hercules Tax Allocation Refunding Bonds, Series 2021
*********************************************************************** Market Conditions as of December 21, 2021 plus 25bps
Assumes 'BBB' Underlying S&P Rating, DSRF, and Proportional Refunding 2005A, 2007A, & 2007B Housing Bonds Refunded on a Tax-Exempt Basis 2007A Housing Bonds Refunded on a Taxable Basis
*********************************************************************** Notes:
1. Preliminary and subject to change. The City's actual results may differ, and Stifel makes no commitment to underwrite at these levels.
2. The use of the 'BBB' S&P rating is based on similar credits.
3. Interest rate assumptions are based on current market conditions and similar credits.
4. The costs of issuance and underwriter's discount are estimates for discussion purposes only.
5. Structured with cash-funded DSRF.
127
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SAVINGS
Successor Agency to the Redevelopment Agency of the City of Hercules Tax Allocation Refunding Bonds, Series 2021
*********************************************************************** Market Conditions as of December 21, 2021 plus 25bps
Assumes 'BBB' Underlying S&P Rating, DSRF, and Proportional Refunding 2005A, 2007A, & 2007B Housing Bonds Refunded on a Tax-Exempt Basis 2007A Housing Bonds Refunded on a Taxable Basis
*********************************************************************** Present Value
Prior Refunding to 05/03/2022
Date Debt Service Debt Service Savings @ 2.0400372%
08/01/2022 6,039,012.51 6,030, 797.84 8,214.67 8,174.01 08/01/2023 8,261,062.52 6,623,217.50 1,637,845.02 1,603,373.01 08/01/2024 8,232,587.52 6,602,320.00 1,630,267.52 1,563,587.99 08/01/2025 8,205,062.52 6,579,570.00 1,625,492.52 1,527,367.84 08/01/2026 8,172,918.76 6,550,318.00 1,622,600.76 1,493,685.17 08/01/2027 8,147,256.26 6,529,254.00 1,618,002.26 1,459,220.13 08/01/2028 8,116,331.26 6,506,375.50 1,609,955.76 1,422,484.01 08/01/2029 8,083,358.76 6,481,103.50 1,602,255.26 1,386,913.23 08/01/2030 8,054,320.02 6,458,281.00 1,596,039.02 1,353,437.98 08/01/2031 8,023,477.52 6,433,395.00 1,590,082.52 1,320,943.29 08/01/2032 7,983,987.52 6,401,244.00 1,582,743.52 1,288,058.61 08/01/2033 7,951,825.02 6,371,349.50 1,580,475.52 1,259,978.33 08/01/2034 6,151,668.76 4,988, 262.50 1,163,406.26 908,963.25 08/01/2035 6,115,250.00 4,959, 425.00 1,155,825.00 884,700.82 08/01/2036 6,115,400.00 4,959, 850.00 1,155,550.00 866,507.95 08/01/2037 3,477,331.26 2,818,050.00 659,281.26 484,688.01 08/01/2038 3,475,700.00 2,819,762.50 655,937.50 472,440.90 08/01/2039 3,478,050.00 2,822,437.50 655,612.50 462,592.43 08/01/2040 3,473,875.00 2,815,862.50 658,012.50 454,822.66 08/01/2041 3,478,162.50 2,820,250.00 657,912.50 445,478.12 08/01/2042 3,475,212.50 2,819,962.50 655,250.00 434,617.74 134,511,850.21 109,391,088.34 25,120,761. 87 21,102,035.49 Savings Summary
PV of savings from cash flow 21,102,035.49
Less: Prior funds on hand (9,948,033.10)
Plus: Refunding funds on hand 6,626,855.61
Net PV Savings 17,780,858.00
Notes:
1. Preliminary and subject to change. The City's actual results may differ, and Stifel makes no commitment to underwrite at these levels.
2. The use of the 'BBB' S&P rating is based on similar credits.
3. Interest rate assumptions are based on current market conditions and similar credits.
4. The costs of issuance and underwriter's discount are estimates for discussion purposes only.
5. Structured with cash-funded DSRF.
128
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SAVINGS
Successor Agency to the Redevelopment Agency of the City of Hercules Current Refunding of Tax Allocation Bonds, Series 2005
Tax Allocation Refunding Bonds, Series 2021
*********************************************************************** Market Conditions as of December 21, 2021 plus 25bps
Assumes 'BBB' Underlying S&P Rating, DSRF, and Proportional Refunding 2005A, 2007A, & 2007B Housing Bonds Refunded on a Tax-Exempt Basis 2007A Housing Bonds Refunded on a Taxable Basis
*********************************************************************** Present Value
Prior Refunding to 05/03/2022
Date Debt Service Debt Service Savings @ 2.0400372%
08/01/2022 2,456,693.75 2,456,072.78 620.97 617.90
08/01/2023 3,182,325.00 2,564,737.50 617,587.50 604,086.07 08/01/2024 3,181,812.50 2,562,162.50 619,650.00 593,807.39 08/01/2025 3,181,837.50 2,561,825.00 620,012.50 582,098.11 08/01/2026 3,182,137.50 2,563,512.50 618,625.00 569,005.90 08/01/2027 3,182,487.50 2,562,012.50 620,475.00 559,107.31 08/01/2028 3,182,625.00 2,562,325.00 620,300.00 547,583.74 08/01/2029 3,182,300.00 2,564,237.50 618,062.50 534,507.98 08/01/2030 3,181,275.00 2,562,537.50 618,737.50 524,191.32 08/01/2031 3,179,287.50 2,562,225.00 617,062.50 512,115.56 08/01/2032 3,181,100.00 2,563,087.50 618,012.50 502,435.79 08/01/2033 3,181,212.50 2,564,912.50 616,300.00 490,808.26 08/01/2034 814,375.00 657,487.50 156,887.50 122,451.42
08/01/2035 813,050.00 656,775.00 156,275.00 119,481.59
39,082,518.75 31,963, 910.28 7,118,608. 47 6,262,298.33 Savings Summary
PV of savings from cash flow 6,262,298.33
Less: Prior funds on hand (3,312,642.42)
Plus: Refunding funds on hand 2,110,468.83
Net PV Savings 5,060,124.74
Notes:
1. Preliminary and subject to change. The City's actual results may differ, and Stifel makes no commitment to underwrite at these levels.
2. The use of the 'BBB' S&P rating is based on similar credits.
3. Interest rate assumptions are based on current market conditions and similar credits.
4. The costs of issuance and underwriter's discount are estimates for discussion purposes only.
5. Structured with cash-funded DSRF.
129
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SAVINGS
Successor Agency to the Redevelopment Agency of the City of Hercules Current Refunding of Tax Allocation Bonds, 2007 Series A Tax Allocation Refunding Bonds, Series 2021
*********************************************************************** Market Conditions as of December 21, 2021 plus 25bps
Assumes 'BBB' Underlying S&P Rating, DSRF, and Proportional Refunding 2005A, 2007A, & 2007B Housing Bonds Refunded on a Tax-Exempt Basis 2007A Housing Bonds Refunded on a Taxable Basis
*********************************************************************** Present Value
Prior Refunding to 05/03/2022
Date Debt Service Debt Service Savings @ 2.0400372%
08/01/2022 2,239,646.88 2,237, 477.50 2,169.38 2,158.64 08/01/2023 3,312,293.76 2,685,512.50 626,781.26 613,692.99 08/01/2024 3,283,793.76 2,665,675.00 618,118.76 593,019.10 08/01/2025 3,258,793.76 2,644,775.00 614,018.76 577,197.87 08/01/2026 3,227,043.76 2,617,812.50 609,231.26 561,139.04 08/01/2027 3,200,118.76 2,595,000.00 605,118.76 546,125.38 08/01/2028 3,166,843.76 2,571,125.00 595,718.76 526,829.14 08/01/2029 3,134,803.76 2,541,187.50 593,616.26 514,375.58 08/01/2030 3,106,353.76 2,520,400.00 585,953.76 497,504.08 08/01/2031 3,076,258.76 2,493,337.50 582,921.26 484,939.22 08/01/2032 3,039,518.76 2,465,212.50 574,306.26 468,141.57 08/01/2033 3,006,368.76 2,436,025.00 570,343.76 455,524.87 08/01/2034 5,337,293.76 4,330, 775.00 1,006,518.76 786,511.83 08/01/2035 5,302,200.00 4,302,650.00 999,550.00 765,219.23 08/01/2036 6,115,400.00 4,959, 850.00 1,155,550.00 866,507.95 08/01/2037 3,477,331.26 2,818,050.00 659,281.26 484,688.01 08/01/2038 3,475,700.00 2,819,762.50 655,937.50 472,440.90 08/01/2039 3,478,050.00 2,822,437.50 655,612.50 462,592.43 08/01/2040 3,473,875.00 2,815,862.50 658,012.50 454,822.66 08/01/2041 3,478,162.50 2,820,250.00 657,912.50 445,478.12 08/01/2042 3,475,212.50 2,819,962.50 655,250.00 434,617.74 74,665,063.26 60,983, 140.00 13,681,923. 26 11,013,526.34 Savings Summary
PV of savings from cash flow 11,013,526.34
Less: Prior funds on hand (4,271,602.29)
Plus: Refunding funds on hand 3,372,195.02
Net PV Savings 10,114,119.07
Notes:
1. Preliminary and subject to change. The City's actual results may differ, and Stifel makes no commitment to underwrite at these levels.
2. The use of the 'BBB' S&P rating is based on similar credits.
3. Interest rate assumptions are based on current market conditions and similar credits.
4. The costs of issuance and underwriter's discount are estimates for discussion purposes only.
5. Structured with cash-funded DSRF.
130
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SAVINGS
Successor Agency to the Redevelopment Agency of the City of Hercules Taxable Refunding of Housing Tax Allocation Bonds, 2007 Series A (Taxable) Tax Allocation Refunding Bonds, Series 2021
*********************************************************************** Market Conditions as of December 21, 2021 plus 25bps
Assumes 'BBB' Underlying S&P Rating, DSRF, and Proportional Refunding 2005A, 2007A, & 2007B Housing Bonds Refunded on a Tax-Exempt Basis 2007A Housing Bonds Refunded on a Taxable Basis
*********************************************************************** Present Value
Prior Refunding to 05/03/2022
Date Debt Service Debt Service Savings @ 2.0400372%
08/01/2022 758,621.88 757,134. 50 1,487.38 1,480.02
08/01/2023 1,017,243.76 819,817.50 197,426.26 193,906.49 08/01/2024 1,014,781.26 821,207.50 193,573.76 186,213.27 08/01/2025 1,015,481.26 820,207.50 195,273.76 183,952.19 08/01/2026 1,014,037.50 817,380.50 196,657.00 181,414.70 08/01/2027 1,015,450.00 822,416.50 193,033.50 174,403.71 08/01/2028 1,014,412.50 820,525.50 193,887.00 171,542.93 08/01/2029 1,015,925.00 821,553.50 194,371.50 168,406.53 08/01/2030 1,014,681.26 820,343.50 194,337.76 164,886.29 08/01/2031 1,015,681.26 822,807.50 192,873.76 160,247.91 08/01/2032 1,013,618.76 818,744.00 194,874.76 158,537.48 08/01/2033 1,013,493.76 817,887.00 195,606.76 155,815.90 11,923,428.20 9,780, 025.00 2,143,403. 20 1,900,807.40
Savings Summary
PV of savings from cash flow 1,900,807.40
Less: Prior funds on hand (1,110,291.88)
Plus: Refunding funds on hand 698,110.79
Net PV Savings 1,488,626.31
Notes:
1. Preliminary and subject to change. The City's actual results may differ, and Stifel makes no commitment to underwrite at these levels.
2. The use of the 'BBB' S&P rating is based on similar credits.
3. Interest rate assumptions are based on current market conditions and similar credits.
4. The costs of issuance and underwriter's discount are estimates for discussion purposes only.
5. Structured with cash-funded DSRF.
131
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SAVINGS
Successor Agency to the Redevelopment Agency of the City of Hercules Current Refunding of Housing Tax Allocation Bonds, 2007 Series B Tax Allocation Refunding Bonds, Series 2021
*********************************************************************** Market Conditions as of December 21, 2021 plus 25bps
Assumes 'BBB' Underlying S&P Rating, DSRF, and Proportional Refunding 2005A, 2007A, & 2007B Housing Bonds Refunded on a Tax-Exempt Basis 2007A Housing Bonds Refunded on a Taxable Basis
*********************************************************************** Present Value
Prior Refunding to 05/03/2022
Date Debt Service Debt Service Savings @ 2.0400372%
08/01/2022 584,050.00 580,113. 06 3,936.94 3,917.46
08/01/2023 749,200.00 553,150.00 196,050.00 191,687.46
08/01/2024 752,200.00 553,275.00 198,925.00 190,548.24
08/01/2025 748,950.00 552,762.50 196,187.50 184,119.67
08/01/2026 749,700.00 551,612.50 198,087.50 182,125.53
08/01/2027 749,200.00 549,825.00 199,375.00 179,583.73
08/01/2028 752,450.00 552,400.00 200,050.00 176,528.21
08/01/2029 750,330.00 554,125.00 196,205.00 169,623.15
08/01/2030 752,010.00 555,000.00 197,010.00 166,856.30
08/01/2031 752,250.00 555,025.00 197,225.00 163,640.60
08/01/2032 749,750.00 554,200.00 195,550.00 158,943.76
08/01/2033 750,750.00 552,525.00 198,225.00 157,829.31
8,840,840.00 6,664, 013.06 2,176,826. 94 1,925,403.42
Savings Summary
PV of savings from cash flow 1,925,403.42
Less: Prior funds on hand (1,253,496.51)
Plus: Refunding funds on hand 446,080.97
Net PV Savings 1,117,987.88
Notes:
1. Preliminary and subject to change. The City's actual results may differ, and Stifel makes no commitment to underwrite at these levels.
2. The use of the 'BBB' S&P rating is based on similar credits.
3. Interest rate assumptions are based on current market conditions and similar credits.
4. The costs of issuance and underwriter's discount are estimates for discussion purposes only.
5. Structured with cash-funded DSRF.
132
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BOND DEBT SERVICE
Successor Agency to the Redevelopment Agency of the City of Hercules Tax Allocation Refunding Bonds, Series 2021
*********************************************************************** Market Conditions as of December 21, 2021 plus 25bps
Assumes 'BBB' Underlying S&P Rating, DSRF, and Proportional Refunding 2005A, 2007A, & 2007B Housing Bonds Refunded on a Tax-Exempt Basis 2007A Housing Bonds Refunded on a Taxable Basis
*********************************************************************** Period
Ending Principal Interest Debt Service
08/01/2022 5,245,000 785, 797.84 6,030,797.84
08/01/2023 3,610,000 3, 013,217.50 6,623,217.50
08/01/2024 3,725,000 2, 877,320.00 6,602,320.00
08/01/2025 3,845,000 2, 734,570.00 6,579,570.00
08/01/2026 3,965,000 2, 585,318.00 6,550,318.00
08/01/2027 4,100,000 2, 429,254.00 6,529,254.00
08/01/2028 4,240,000 2, 266,375.50 6,506,375.50
08/01/2029 4,385,000 2, 096,103.50 6,481,103.50
08/01/2030 4,540,000 1, 918,281.00 6,458,281.00
08/01/2031 4,700,000 1, 733,395.00 6,433,395.00
08/01/2032 4,860,000 1, 541,244.00 6,401,244.00
08/01/2033 5,030,000 1, 341,349.50 6,371,349.50
08/01/2034 3,855,000 1, 133,262.50 4,988,262.50
08/01/2035 3,990,000 969, 425.00 4,959,425.00
08/01/2036 4,160,000 799, 850.00 4,959,850.00
08/01/2037 2,195,000 623, 050.00 2,818,050.00
08/01/2038 2,290,000 529, 762.50 2,819,762.50
08/01/2039 2,390,000 432, 437.50 2,822,437.50
08/01/2040 2,485,000 330, 862.50 2,815,862.50
08/01/2041 2,595,000 225, 250.00 2,820,250.00
08/01/2042 2,705,000 114, 962.50 2,819,962.50
78,910,000 30,481,088. 34 109,391,088.34
Notes:
1. Preliminary and subject to change. The City's actual results may differ, and Stifel makes no commitment to underwrite at these levels.
2. The use of the 'BBB' S&P rating is based on similar credits.
3. Interest rate assumptions are based on current market conditions and similar credits.
4. The costs of issuance and underwriter's discount are estimates for discussion purposes only.
5. Structured with cash-funded DSRF.
133
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AGGREGATE DEBT SERVICE
Successor Agency to the Redevelopment Agency of the City of Hercules Tax Allocation Refunding Bonds, Series 2021
*********************************************************************** Market Conditions as of December 21, 2021 plus 25bps
Assumes 'BBB' Underlying S&P Rating, DSRF, and Proportional Refunding 2005A, 2007A, & 2007B Housing Bonds Refunded on a Tax-Exempt Basis 2007A Housing Bonds Refunded on a Taxable Basis
*********************************************************************** Taxable
Refunding of Current
Current Current Housing Tax Refunding of
Refunding of Refunding of A llocation Housing Tax
Tax Allocation Tax Alloc ation Bonds, 2007 Allocation
Period Bonds, Series Bonds, 2007 Series A Bonds, 2007 Catellus Housing Aggregate Ending 2005 Series A (Taxable) Series B Payments Bridge Loan Debt Service 08/01/2022 2,456,072.78 2,237,477.50 757,134.50 580,113.06 2,000,000 130,000 8,160,797.84 08/01/2023 2,564,737.50 2,685,512.50 819,817.50 553,150.00 2,000,000 130,000 8,753,217.50 08/01/2024 2,562,162.50 2,665,675.00 821,207.50 553,275.00 2,000,000 130,000 8,732,320.00 08/01/2025 2,561,825.00 2,644,775.00 820,207.50 552,762.50 1,333,333 7,912,903.00 08/01/2026 2,563,512.50 2,617,812.50 817,380.50 551,612.50 1,333,333 7,883,651.00 08/01/2027 2,562,012.50 2,595,000.00 822,416.50 549,825.00 1,333,333 7,862,587.00 08/01/2028 2,562,325.00 2,571,125.00 820,525.50 552,400.00 1,333,333 7,839,708.50 08/01/2029 2,564,237.50 2,541,187.50 821,553.50 554,125.00 1,333,333 7,814,436.50 08/01/2030 2,562,537.50 2,520,400.00 820,343.50 555,000.00 1,333,333 7,791,614.00 08/01/2031 2,562,225.00 2,493,337.50 822,807.50 555,025.00 1,333,333 7,766,728.00 08/01/2032 2,563,087.50 2,465,212.50 818,744.00 554,200.00 1,333,333 7,734,577.00 08/01/2033 2,564,912.50 2,436,025.00 817,887.00 552,525.00 1,333,333 7,704,682.50 08/01/2034 657,487.50 4,330,775.00 1,333,333 6,321,595.50 08/01/2035 656,775.00 4,302,650.00 1,333,333 6,292,758.00 08/01/2036 4,959,850.00 1,333,333 6,293,183.00
08/01/2037 2,818,050.00 1,333,333 4,151,383.00
08/01/2038 2,819,762.50 1,333,333 4,153,095.50
08/01/2039 2,822,437.50 1,333,333 4,155,770.50
08/01/2040 2,815,862.50 1,333,333 4,149,195.50
08/01/2041 2,820,250.00 1,333,333 4,153,583.00
08/01/2042 2,819,962.50 1,333,333 4,153,295.50
31,963,910.28 60,983,140.00 9,780,025.00 6,664,013.06 29,999,994 390,000 139,781,082.34 Notes:
1. Preliminary and subject to change. The City's actual results may differ, and Stifel makes no commitment to underwrite at these levels.
2. The use of the 'BBB' S&P rating is based on similar credits.
3. Interest rate assumptions are based on current market conditions and similar credits.
4. The costs of issuance and underwriter's discount are estimates for discussion purposes only.
5. Structured with cash-funded DSRF.
134
Dec 23, 2021 10:48 am Prepared by Stifel, Nicolaus & Company, Inc (SM) Page 13
ESCROW REQUIREMENTS
Successor Agency to the Redevelopment Agency of the City of Hercules Tax Allocation Refunding Bonds, Series 2021
*********************************************************************** Market Conditions as of December 21, 2021 plus 25bps
Assumes 'BBB' Underlying S&P Rating, DSRF, and Proportional Refunding 2005A, 2007A, & 2007B Housing Bonds Refunded on a Tax-Exempt Basis 2007A Housing Bonds Refunded on a Taxable Basis
*********************************************************************** Period Principal
Ending Interest Redeemed Total
05/16/2022 1,309,007.29 90, 650,000.00 91,959,007.29
1,309,007.29 90,650,000.00 91,959,007.29
Notes:
1. Preliminary and subject to change. The City's actual results may differ, and Stifel makes no commitment to underwrite at these levels.
2. The use of the 'BBB' S&P rating is based on similar credits.
3. Interest rate assumptions are based on current market conditions and similar credits.
4. The costs of issuance and underwriter's discount are estimates for discussion purposes only.
5. Structured with cash-funded DSRF.
135
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ESCROW COST
Successor Agency to the Redevelopment Agency of the City of Hercules Tax Allocation Refunding Bonds, Series 2021
*********************************************************************** Market Conditions as of December 21, 2021 plus 25bps
Assumes 'BBB' Underlying S&P Rating, DSRF, and Proportional Refunding 2005A, 2007A, & 2007B Housing Bonds Refunded on a Tax-Exempt Basis 2007A Housing Bonds Refunded on a Taxable Basis
*********************************************************************** Purchase Cost of Cash Total
Date Securities Deposit Escrow Cost
05/03/2022 91,959,007.29 91,959,007.29
0 91,959,007.29 91,959,007.29
Notes:
1. Preliminary and subject to change. The City's actual results may differ, and Stifel makes no commitment to underwrite at these levels.
2. The use of the 'BBB' S&P rating is based on similar credits.
3. Interest rate assumptions are based on current market conditions and similar credits.
4. The costs of issuance and underwriter's discount are estimates for discussion purposes only.
5. Structured with cash-funded DSRF.
136
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ESCROW SUFFICIENCY
Successor Agency to the Redevelopment Agency of the City of Hercules Tax Allocation Refunding Bonds, Series 2021
*********************************************************************** Market Conditions as of December 21, 2021 plus 25bps
Assumes 'BBB' Underlying S&P Rating, DSRF, and Proportional Refunding 2005A, 2007A, & 2007B Housing Bonds Refunded on a Tax-Exempt Basis 2007A Housing Bonds Refunded on a Taxable Basis
*********************************************************************** Escrow Net Escrow Excess Excess
Date Requirement Receipts Receipts Balance
05/03/2022 91,959,007.29 91, 959,007.29 91,959,007.29
05/16/2022 91,959,007.29 (91,959,007.29)
91,959,007.29 91, 959,007.29 0.00
Notes:
1. Preliminary and subject to change. The City's actual results may differ, and Stifel makes no commitment to underwrite at these levels.
2. The use of the 'BBB' S&P rating is based on similar credits.
3. Interest rate assumptions are based on current market conditions and similar credits.
4. The costs of issuance and underwriter's discount are estimates for discussion purposes only.
5. Structured with cash-funded DSRF.
137
Dec 23, 2021 10:48 am Prepared by Stifel, Nicolaus & Company, Inc (SM) Page 16
SUMMARY OF BONDS REFUNDED
Successor Agency to the Redevelopment Agency of the City of Hercules Current Refunding of Tax Allocation Bonds, Series 2005
Tax Allocation Refunding Bonds, Series 2021
*********************************************************************** Market Conditions as of December 21, 2021 plus 25bps
Assumes 'BBB' Underlying S&P Rating, DSRF, and Proportional Refunding 2005A, 2007A, & 2007B Housing Bonds Refunded on a Tax-Exempt Basis 2007A Housing Bonds Refunded on a Taxable Basis
*********************************************************************** PRI - Prior Debt
Maturity Interest Par Call Call
Bond Date Rate Amount Date Price
Tax Allocation Bonds, Series 2005, 2005A, TERM25:
08/01/2025 5.000% 6,285, 000.00 05/16/2022 100.000
Tax Allocation Bonds, Series 2005, 2005A, TERM29:
08/01/2029 5.000% 7,635, 000.00 05/16/2022 100.000
Tax Allocation Bonds, Series 2005, 2005A, TERM35:
08/01/2035 5.000% 10,250,000.00 05/16/2022 100.000
Tax Allocation Bonds, Series 2005, 2005A, T_ESCROW:
08/01/2035 4.750% 4,945, 000.00 05/16/2022 100.000
29,115,000.00
Notes:
1. Preliminary and subject to change. The City's actual results may differ, and Stifel makes no commitment to underwrite at these levels.
2. The use of the 'BBB' S&P rating is based on similar credits.
3. Interest rate assumptions are based on current market conditions and similar credits.
4. The costs of issuance and underwriter's discount are estimates for discussion purposes only.
5. Structured with cash-funded DSRF.
138
Dec 23, 2021 10:48 am Prepared by Stifel, Nicolaus & Company, Inc (SM) Page 17
SUMMARY OF BONDS REFUNDED
Successor Agency to the Redevelopment Agency of the City of Hercules Current Refunding of Tax Allocation Bonds, 2007 Series A Tax Allocation Refunding Bonds, Series 2021
*********************************************************************** Market Conditions as of December 21, 2021 plus 25bps
Assumes 'BBB' Underlying S&P Rating, DSRF, and Proportional Refunding 2005A, 2007A, & 2007B Housing Bonds Refunded on a Tax-Exempt Basis 2007A Housing Bonds Refunded on a Taxable Basis
*********************************************************************** PRI - Prior Debt
Maturity Interest Par Call Call
Bond Date Rate Amount Date Price
Tax Allocation Bonds, 2007 Series A, 2007A, SERIALS:
08/01/2022 5.000% 1,140, 000.00 05/16/2022 100.000
08/01/2023 5.000% 1,170, 000.00 05/16/2022 100.000
08/01/2024 5.000% 1,200, 000.00 05/16/2022 100.000
08/01/2025 5.000% 1,235, 000.00 05/16/2022 100.000
08/01/2026 4.500% 1,265, 000.00 05/16/2022 100.000
08/01/2027 4.500% 1,295, 000.00 05/16/2022 100.000
7,305,000.00
Tax Allocation Bonds, 2007 Series A, 2007A, TERM32:
08/01/2032 4.700% 6,925, 000.00 05/16/2022 100.000
Tax Allocation Bonds, 2007 Series A, 2007A, TERM37A:
08/01/2037 4.625% 16,555,000.00 05/16/2022 100.000
Tax Allocation Bonds, 2007 Series A, 2007A, TERM37B:
08/01/2037 5.000% 500,000.00 05/16/2022 100.000
Tax Allocation Bonds, 2007 Series A, 2007A, TERM42A:
08/01/2042 4.750% 10,120,000.00 05/16/2022 100.000
Tax Allocation Bonds, 2007 Series A, 2007A, TERM42B:
08/01/2042 5.000% 5,000, 000.00 05/16/2022 100.000
46,405,000.00
Notes:
1. Preliminary and subject to change. The City's actual results may differ, and Stifel makes no commitment to underwrite at these levels.
2. The use of the 'BBB' S&P rating is based on similar credits.
3. Interest rate assumptions are based on current market conditions and similar credits.
4. The costs of issuance and underwriter's discount are estimates for discussion purposes only.
5. Structured with cash-funded DSRF.
139
Dec 23, 2021 10:48 am Prepared by Stifel, Nicolaus & Company, Inc (SM) Page 18
SUMMARY OF BONDS REFUNDED
Successor Agency to the Redevelopment Agency of the City of Hercules Taxable Refunding of Housing Tax Allocation Bonds, 2007 Series A (Taxable) Tax Allocation Refunding Bonds, Series 2021
*********************************************************************** Market Conditions as of December 21, 2021 plus 25bps
Assumes 'BBB' Underlying S&P Rating, DSRF, and Proportional Refunding 2005A, 2007A, & 2007B Housing Bonds Refunded on a Tax-Exempt Basis 2007A Housing Bonds Refunded on a Taxable Basis
*********************************************************************** PRI - Prior Debt
Maturity Interest Par Call Call
Bond Date Rate Amount Date Price
Housing Tax Allocation Bonds, 2007 Series A (Taxable), 2007HTX, TERM22:
08/01/2022 6.000% 500,000.00 05/16/2022 100.000
Housing Tax Allocation Bonds, 2007 Series A (Taxable), 2007HTX, TERM33:
08/01/2033 6.125% 7,955, 000.00 05/16/2022 100.000
8,455,000.00
Notes:
1. Preliminary and subject to change. The City's actual results may differ, and Stifel makes no commitment to underwrite at these levels.
2. The use of the 'BBB' S&P rating is based on similar credits.
3. Interest rate assumptions are based on current market conditions and similar credits.
4. The costs of issuance and underwriter's discount are estimates for discussion purposes only.
5. Structured with cash-funded DSRF.
140
Dec 23, 2021 10:48 am Prepared by Stifel, Nicolaus & Company, Inc (SM) Page 19
SUMMARY OF BONDS REFUNDED
Successor Agency to the Redevelopment Agency of the City of Hercules Current Refunding of Housing Tax Allocation Bonds, 2007 Series B Tax Allocation Refunding Bonds, Series 2021
*********************************************************************** Market Conditions as of December 21, 2021 plus 25bps
Assumes 'BBB' Underlying S&P Rating, DSRF, and Proportional Refunding 2005A, 2007A, & 2007B Housing Bonds Refunded on a Tax-Exempt Basis 2007A Housing Bonds Refunded on a Taxable Basis
*********************************************************************** PRI - Prior Debt
Maturity Interest Par Call Call
Bond Date Rate Amount Date Price
Housing Tax Allocation Bonds, 2007 Series B, 2007B, SERIAL:
08/01/2022 4.500% 420,000.00 05/16/2022 100.000
Housing Tax Allocation Bonds, 2007 Series B, 2007B, TERM27:
08/01/2027 5.000% 2,435, 000.00 05/16/2022 100.000
Housing Tax Allocation Bonds, 2007 Series B, 2007B, TERM30:
08/01/2030 4.800% 1,775, 000.00 05/16/2022 100.000
Housing Tax Allocation Bonds, 2007 Series B, 2007B, TERM33:
08/01/2033 5.000% 2,045, 000.00 05/16/2022 100.000
6,675,000.00
Notes:
1. Preliminary and subject to change. The City's actual results may differ, and Stifel makes no commitment to underwrite at these levels.
2. The use of the 'BBB' S&P rating is based on similar credits.
3. Interest rate assumptions are based on current market conditions and similar credits.
4. The costs of issuance and underwriter's discount are estimates for discussion purposes only.
5. Structured with cash-funded DSRF.
141
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UNDERWRITER EXCLUSION DISCLOSURE
Successor Agency to the Redevelopment Agency of the City of Hercules Tax Allocation Refunding Bonds, Series 2021
*********************************************************************** Market Conditions as of December 21, 2021 plus 25bps
Assumes 'BBB' Underlying S&P Rating, DSRF, and Proportional Refunding 2005A, 2007A, & 2007B Housing Bonds Refunded on a Tax-Exempt Basis 2007A Housing Bonds Refunded on a Taxable Basis
*********************************************************************** Stifel, Nicolaus & Company, Incorporated ('Stifel') has been engaged or appointed to serve as an underwriter or placement agent with respect to a particular issuance of municipal securities to which the attached material relates and Stifel is providing all information and advice contained in the attached material in its capacity as underwriter or placement agent for that particular issuance. As outlined in the SEC's Municipal Advisor Rule, Stifel has not acted, and will not act, as your municipal advisor with respect to the issuance of the municipal securities that is the subject to the engagement.
Stifel is providing information and is declaring to the proposed municipal issuer that it has done so within the regulatory framework of MSRB Rule G-23 as an underwriter (by definition also including the role of placement agent) and not as a financial advisor, as defined therein, with respect to the referenced proposed issuance of municipal securities. The primary role of Stifel, as an underwriter, is to purchase securities for resale to investors in an arm's-length commercial transaction. Serving in the role of underwriter, Stifel has financial and other interests that differ from those of the issuer. The issuer should consult with its own financial and/or municipal, legal, accounting, tax and other advisors, as applicable, to the extent it deems appropriate.
These materials have been prepared by Stifel for the client or potential client to whom such materials are directly addressed and delivered for discussion purposes only. All terms and conditions are subject to further discussion and negotiation. Stifel does not express any view as to whether financing options presented in these materials are achievable or will be available at the time of any contemplated transaction. These materials do not constitute an offer or solicitation to sell or purchase any securities and are not a commitment by Stifel to provide or arrange any financing for any transaction or to purchase any security in connection therewith and may not relied upon as an indication that such an offer will be provided in the future. Where indicated, this presentation may contain information derived from sources other than Stifel. While we believe such information to be accurate and complete, Stifel does not guarantee the accuracy of this information. This material is based on information currently available to Stifel or its sources and is subject to change without notice. Stifel does not provide accounting, tax or legal advice; however, you should be aware that any proposed indicative transaction could have accounting, tax, legal or other implications that should be discussed with your advisors and / or counsel as you deem appropriate.
Notes:
1. Preliminary and subject to change. The City's actual results may differ, and Stifel makes no commitment to underwrite at these levels.
2. The use of the 'BBB' S&P rating is based on similar credits.
3. Interest rate assumptions are based on current market conditions and similar credits.
4. The costs of issuance and underwriter's discount are estimates for discussion purposes only.
5. Structured with cash-funded DSRF.
142
Stradling Yocca Carlson & Rauth
Draft of 12/22/21
4880-0008-2946v4/200861-0005
INDENTURE OF TRUST
Dated as of _____ 1, 2022
by and between the
SUCCESSOR AGENCY TO THE
HERCULES REDEVELOPMENT AGENCY
and
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,
as Trustee
Relating to
$__________
SUCCESSOR AGENCY TO THE
HERCULES REDEVELOPMENT AGENCY
TAX ALLOCATION REFUNDING BONDS, SERIES 2022A
$__________
SUCCESSOR AGENCY TO THE
HERCULES REDEVELOPMENT AGENCY
TAX ALLOCATION REFUNDING BONDS, SERIES 2022B (FEDERALLY TAXABLE)
143
TABLE OF CONTENTS
Page
i
4880-0008-2946v4/200861-0005
ARTICLE I
DETERMINATIONS; DEFINITIONS
Section 1.01 Findings and Determinations ..................................................................................... 3 Section 1.02 Definitions ................................................................................................................. 3 Section 1.03 Rules of Construction .............................................................................................. 13
ARTICLE II
AUTHORIZATION AND TERMS
Section 2.01 Authorization of 2022 Bonds ................................................................................... 13 Section 2.02 Terms of 2022 Bonds ............................................................................................... 14 Section 2.03 Redemption of 2022 Bonds ..................................................................................... 15 Section 2.04 Form of 2022 Bonds ................................................................................................ 19 Section 2.05 Execution of Bonds .................................................................................................. 19 Section 2.06 Transfer of Bonds .................................................................................................... 19 Section 2.07 Exchange of Bonds .................................................................................................. 20 Section 2.08 Registration of Bonds .............................................................................................. 20 Section 2.09 Bonds Mutilated, Lost, Destroyed or Stolen ........................................................... 21 Section 2.10 Book-Entry System .................................................................................................. 21 Section 2.11 Applicability of Provisions to Parity Debt ............................................................... 22
ARTICLE III
DEPOSIT AND APPLICATION; ADDITIONAL DEBT
Section 3.01 Issuance of Bonds .................................................................................................... 23 Section 3.02 Application of Proceeds of Sale and Certain Other Amounts ................................. 23 Section 3.03 Costs of Issuance Fund ............................................................................................ 23 Section 3.04 Issuance of Parity Debt ............................................................................................ 24 Section 3.05 Issuance of Subordinate Debt .................................................................................. 24
ARTICLE IV
SECURITY OF BONDS; FLOW OF FUNDS
Section 4.01 Security of Bonds; Equal Security ........................................................................... 24 Section 4.02 Redevelopment Obligation Retirement Fund; Special Fund; Deposit of Pledged Tax Revenues ............................................................................................. 26 Section 4.03 Deposit of Amounts by Trustee ............................................................................... 26 Section 4.04 Rebate Fund ............................................................................................................. 29 Section 4.05 [Provisions Relating to 2022 Insurance Policy] ...................................................... 30 Section 4.06 [Provisions Relating to 2022 Reserve Policy] ......................................................... 30
ARTICLE V
OTHER COVENANTS OF THE SUCCESSOR AGENCY
Section 5.01 Punctual Payment .................................................................................................... 31 Section 5.02 Limitation on Additional Indebtedness; Against Encumbrances ............................ 31 Section 5.03 Extension of Payment .............................................................................................. 31 Section 5.04 Payment of Claims ................................................................................................... 31 Section 5.05 Books and Accounts; Financial Statements ............................................................. 31 Section 5.06 Protection of Security and Rights of Owners .......................................................... 32 144
TABLE OF CONTENTS
(continued)
Page
ii
4880-0008-2946v4/200861-0005
Section 5.07 Payments of Taxes and Other Charges .................................................................... 32 Section 5.08 Taxation of Leased Property .................................................................................... 32 Section 5.09 Disposition of Property ............................................................................................ 32 Section 5.10 Maintenance of Pledged Tax Revenues ................................................................... 33 Section 5.11 Tax Covenants ......................................................................................................... 33 Section 5.12 Continuing Disclosure ............................................................................................. 34 Section 5.13 Compliance with the Dissolution Act ...................................................................... 34 Section 5.14 Further Assurances .................................................................................................. 35 Section 5.15 Last and Final Recognized Obligation Payment Schedule ...................................... 35 Section 5.16 Meet and Confer; Recognized Obligation Payment Schedule ................................. 35
ARTICLE VI
THE TRUSTEE
Section 6.01 Duties, Immunities and Liabilities of Trustee ......................................................... 36 Section 6.02 Merger or Consolidation .......................................................................................... 38 Section 6.03 Liability of Trustee .................................................................................................. 38 Section 6.04 Right to Rely on Documents and Opinions ............................................................. 40 Section 6.05 Preservation and Inspection of Documents ............................................................. 41 Section 6.06 Compensation and Indemnification ......................................................................... 41 Section 6.07 Deposit and Investment of Moneys in Funds .......................................................... 42 Section 6.08 Accounting Records and Financial Statements ....................................................... 43 Section 6.09 Other Transactions with Successor Agency ............................................................ 43
ARTICLE VII
MODIFICATION OR AMENDMENT OF THIS INDENTURE
Section 7.01 Amendment With And Without Consent of Owners ............................................... 43 Section 7.02 Effect of Supplemental Indenture ............................................................................ 44 Section 7.03 Endorsement or Replacement of Bonds After Amendment .................................... 44 Section 7.04 Amendment by Mutual Consent .............................................................................. 44 Section 7.05 Opinion of Counsel .................................................................................................. 45 Section 7.06 Copy of Supplemental Indenture to S&P and Moody’s .......................................... 45
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES OF OWNERS
Section 8.01 Events of Default and Acceleration of Maturities ................................................... 45 Section 8.02 Application of Funds Upon Acceleration ................................................................ 47 Section 8.03 Power of Trustee to Control Proceedings ................................................................ 47 Section 8.04 Limitation on Owner’s Right to Sue ........................................................................ 47 Section 8.05 Non-Waiver ............................................................................................................. 48 Section 8.06 Actions by Trustee as Attorney-in-Fact ................................................................... 48 Section 8.07 Remedies Not Exclusive .......................................................................................... 49 Section 8.08 Determination of Percentage of Bondowners .......................................................... 49 145
TABLE OF CONTENTS
(continued)
Page
iii
4880-0008-2946v4/200861-0005
ARTICLE IX
MISCELLANEOUS
Section 9.01 Special Obligations .................................................................................................. 49 Section 9.02 Benefits Limited to Parties ...................................................................................... 49 Section 9.03 Successor is Deemed Included in All References to Predecessor ........................... 49 Section 9.04 Discharge of Indenture ............................................................................................ 49 Section 9.05 Execution of Documents and Proof of Ownership by Owners ................................ 51 Section 9.06 Disqualified Bonds .................................................................................................. 51 Section 9.07 Waiver of Personal Liability .................................................................................... 51 Section 9.08 Destruction of Cancelled Bonds .............................................................................. 51 Section 9.09 Notices ..................................................................................................................... 51 Section 9.10 Partial Invalidity ...................................................................................................... 52 Section 9.11 Unclaimed Moneys .................................................................................................. 52 Section 9.12 Execution in Counterparts; Electronic Delivery of Signatures ................................ 52 Section 9.13 Governing Law ........................................................................................................ 53 Section 9.14 OFAC Compliance .................................................................................................. 53
Signatures ............................................................................................................................... S-1
EXHIBIT A FORM OF BOND .................................................................................................. A-1 EXHIBIT B REDEVELOPMENT PLAN ................................................................................. B-1
146
4880-0008-2946v4/200861-0005
INDENTURE OF TRUST
THIS INDENTURE OF TRUST (this “Indenture”) is made and entered into and dated as of _____ 1, 2022, by and between the SUCCESSOR AGENCY TO THE HERCULES REDEVELOPMENT AGENCY, a public entity duly existing under the laws of the State of California (the “Successor Agency”), as successor to the redevelopment activities of the Hercules Redevelopment Agency (the “Former Agency”) and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a national banking association duly organized and existing under the laws of the United States of America, as trustee (the “Trustee”);
WITNESSETH:
WHEREAS, the Former Agency was a public body, corporate and pol itic, duly established and authorized to transact business and exercise powers under and pursuant to the provisions of Part 1 of Division 24 of the Health and Safety Code of the State (collectively, as amended, the “Law”), including the power to issue bonds and incur debt for any of its corporate purposes; WHEREAS, an Amended and Restated Redevelopment Plan (the “Redevelopment Plan”) for the Merged Dynamite Redevelopment Project Area and Project Area No. 2 (the “Project Area”) of the Former Agency was adopted and amended from time to time pursuant to ordinances of the City of Hercules (the “City”) set forth in Exhibit B , in compliance with all requirements of the Law, and all requirements of law for and precedent to the adoption and approval of the Redevelopment Plan, as amended, have been duly complied with;
WHEREAS, in order to finance and refinance redevelopment activities within or of benefit to the Project Area, the Former Agency issued certain outstanding obligations more fully described herein (collectively, the “Refunded Obligations”);
WHEREAS, by implementation of California Assembly Bill X1 26, which amended provisions of the Law, and the California Supreme Court ’s decision in California Redevelopment Association v. Matosantos, the redevelopment components of the Former Agency were dissolved on February 1, 2012 in accordance with California Assembly Bill X1 26 approved by the Governor of the State of California on June 28, 2011 (as amended, the “Dissolution Act”), and on February 1, 2012, the Successor Agency assumed the redevelopment related duties and obligations of the Former Agency as provided in the Dissolution Act, including, without limitation, the obligations of the Former Agency under the Refunded Obligations and the related documents to which the Former Agency was a party; WHEREAS, California Health and Safety Code Section 34177.5(a)(1) authorizes successor agencies to refund outstanding bonds or other indebtedness provided that: (i) the total interest cost to maturity on the refunding b onds or other indebtedness, plus the principal amount of the refunding bonds or other indebtedness, does not exceed the total remaining interest cost to maturity on the bonds or other indebtedness to be refunded, plus the remaining principal of the bonds o r other indebtedness to be refunded; and (ii) the principal amount of the refunding bonds or other indebtedness does not exceed the amount required to defease the bonds or other indebtedness to be refunded, to establish customary debt service reserves and to pay related costs of issuance; 147
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WHEREAS, said Section 34177.5 also authorizes the Successor Agency to issue bonds pursuant to Article 11 (commencing with Section 53580) of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code (the “Refunding Law”) for the purposes and within the parameters set forth in said Section 34177.5;
WHEREAS, the Successor Agency desires to refund the Refunded Obligations pursuant to California Health and Safety Code Section 34177.5 in order to achieve debt service savings; WHEREAS, in order to provide moneys to refund the Refunded Obligations in accordance with California Health and Safety Code Section 34177.5(a)(1), the Successor Agency has determined to issue its Tax Allocation Refunding Bonds, Series 2022A (the “2022A Bonds”) and its Tax Allocation Refunding Bonds, Series 2022B (Federally Taxable) (the “2022B Bonds” and, together with the 2022A Bonds, the “2022 Bonds”);
WHEREAS, the 2022 Bonds will be secured by a pledge of and lien on the Pledged Tax Revenues (de fined herein), subject to (a) the payment by the County Auditor-Controller of certain amounts (i) to the County for administrative costs allowed under Section 34182 and Section 95.3 of the Revenue and Taxation Code, (ii) to the County pursuant to the County Agreement (defined below) (unless payments to the County under the County Agreement are subordinated to payments on the 2022 Bonds and Parity Debt), and (iii) to taxing entities pursuant to Sections 33607.5, 33607.7 and 33676 of the Law (unless such payments are subordinated to payments on the 2022 Bonds and Parity Debt pursuant to Section 33607.5(e) of the Law or Section 34177.5(c) of the Dissolution Act), and (b) the payment by the Successor Agency of amounts due under the Prior Agreements (defined herein); WHEREAS, in order to provide for the authentication and delivery of the 2022 Bonds, to establish and declare the terms and conditions upon which the 2022 Bonds are to be issued and secured and to secure the payment of the principal thereof and interest and redemption premium (if any) thereon, the Successor Agency and the Trustee have duly authorized the execution and delivery of this Indenture; and
WHEREAS, the Successor Agency has determined that all acts and proceedings required by law necessary to make the 2022 Bonds when executed by the Successor Agency, and authenticated and delivered by the Trustee, the valid, binding and legal special obligations of the Successor Agency, and to constitute this Indenture a legal, valid and binding agreement for the uses and purposes herein set forth in accordance with its terms, have been done or taken; NOW, THEREFORE, THIS INDENTURE WITNESSETH , that in order to secure the payment of the principal of and the interest and redemption premium (if any) on all the Bonds (as defined below), including the 2022 Bonds, issued and Outstanding under this Indenture, according to their tenor, and to secure the performance and observance o f all the covenants and conditions therein and herein set forth, and to declare the terms and conditions upon and subject to which the Bonds, including the 2022 Bonds, are to be issued and received, and in consideration of the premises and of the mutual covenants herein contained and of the purchase and acceptance of the Bonds, including the 2022 Bonds, by the Owners thereof, and for other valuable considerations, the receipt of which is hereby acknowledged, the Successor Agency and the Trustee do hereby co venant and agree with one another, for the benefit of the respective Owners from time to time of the Bonds, including the 2022 Bonds, as follows:
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ARTICLE I
DETERMINATIONS; DEFINITIONS
Section 1.01 Findings and Determinations. The Successor Agency has reviewed all proceedings heretofore taken and, as a result of such review, hereby finds and determines that all things, conditions and acts required by law to exist, happen or be performed precedent to and in connection with the issuance of the 2022 Bonds do exist, have happened a nd have been performed in due time, form and manner as required by law, and the Successor Agency is now duly empowered, pursuant to each and every requirement of law, to issue the 2022 Bonds in the manner and form provided in this Indenture.
Section 1.02 Definitions. Unless the context otherwise requires, the terms defined in this Section 1.02 shall, for all purposes of this Indenture, of any Supplemental Indenture, and of any certificate, opinion or other document herein mentioned, have the meanings herein specified. “Additional Allowance ” means, as the date of calculation, the amount of Pledged Tax Revenues which, as shown in the Report of an Independent Redevelopment Consultant, are estimated to be receivable by the Successor Agency as a result of increases in the as sessed valuation of taxable property in the Project Area due to construction which has been completed or transfers of ownership that have occurred but are not yet reflected on the tax rolls. For purposes of this definition, the term “increases in the asse ssed valuation” means the amount by which the assessed valuation of taxable property in the Project Area in any Fiscal Year is estimated to exceed the assessed valuation of taxable property in the Project Area (as reported by the County Auditor -Controller) for the Fiscal Year for which such calculation is made.
“Annual Debt Service” means, for each Bond Year, the sum of (a) the interest payable on the Outstanding Bonds in such Bond Year, and (b) the principal amount of the Outstanding Bonds scheduled to be paid in such Bond Year.
“Bonds” means the 2022 Bond s and any Parity Debt issued pursuant to a Supplemental Indenture.
“Bond Counsel” means (a) Stradling Yocca Carlson & Rauth, a Professional Corporation, or (b) any other attorney or firm of attorneys appoi nted by or acceptable to the Successor Agency, of nationally-recognized experience in the issuance of obligations the interest on which is excludable from gross income for federal income tax purposes under the Code. “Bond Year” means each twelve (12) month period extending from August 2 in one calendar year to August 1 of the succeeding calendar year, both dates inclusive; provided that the first Bond Year with respect to the 2022 Bonds shall commence on the Closing Date and end on August 1, 2022. “Business Day” means any day, other than a Saturday or Sunday or a day on which commercial banks in New York, New York, or any other city or cities where the Principal Corporate Trust Office of the Trustee is located are required or aut horized by law to close or a day on which the Federal Reserve System is closed.
“City” means the City of Hercules.
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“Closing Date ” means the date on which a series of Bonds is delivered by the Successor Agency to the original purchaser thereof. The Closing Date with respect to the 2022 Bonds is _____, 2022.
“Code” means the Internal Revenue Code of 1986, as amended. “Continuing Disclosure Certificate ” means that certain Continuing Disclosure Certificate, with respect to the 2022 Bonds, executed by the Succe ssor Agency, as originally executed and as it may be amended from time to time in accordance with the terms thereof. “Costs of Issuance ” means all items of expense directly or indirectly payable by or reimbursable to the Successor Agency relating to the au thorization, issuance, sale and delivery of the Bonds, including but not limited to printing expenses, bond insurance and surety bond premiums, if any, rating agency fees, filing and recording fees, initial fees and charges and first annual administrative fee of the Trustee and Escrow Bank and fees and expenses of its counsel, fees, charges and disbursements of attorneys, financial advisors, accounting firms, consultants and other professionals, fees and charges for preparation, execution and safekeeping of the Bonds, administrative costs of the Successor Agency and the City incurred in connection with the issuance of the Bonds, expenses of the underwriters of the Bonds, and any other cost, charge or fee in connection with the original issuance of the Bonds.
“Costs of Issuance Fund ” means the fund by that name established and held by the Trustee pursuant to Section 3.03.
“County” means Contra Costa County.
“County Agreement ” means that certain Agreement between the Former Agency and the County providing assurances of tax increment limitations, dated as of November 23, 1983, as amended by that certain First Amendment to County Agreement, dated June 5, 2001, and as further amended and as further amended and subordinated (in part) by that certain Amended and Restated Subordination Agreement by and between the Successor Agency and the County, dated as of June 28, 2014. “County Auditor-Controller” means the Auditor-Controller of the County. “Debt Service Fund ” means the fund by that name established and held by the Trustee pursuant to Section 4.03.
“Defeasance Obligations” means any of the following which, at the time of investment, are legal investments under the laws of the State for the moneys proposed to be invested therein and are in compliance with the Successor Agency’s investment policies then in effect (provided that the Trustee shall be entitled to rely upon any investment direction from the Successor Agency as conclusive certification to the Trustee that investments described therein are legal and are in compliance with the Successor Agency’s investment policies then in effect), but only to the extent the same are acquired at Fair Market Value:
(a) Cash;
(b) Federal Securities, including direct obligat ions of the Treasury which have been stripped by the Treasury itself, CATS, TIGRS and similar securities; 150
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(c) The interest component of Resolution Funding Corporation strips which have been stripped by request to the Federal Reserve Bank of New York in book-entry form; (d) Pre-refunded municipal bonds rated “Aaa” by Moody’s and “AAA” by S&P, provided that, if the issue is rated only by S&P (i.e., there is no Moody’s rating), then the pre-refunded municipal bonds must have been pre -refunded with cash, direct U.S. or U.S. guaranteed obligations, or AAA rated pre-refunded municipals; and
(e) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following federal agencies and provided such obligations are backed by the full faith and credit of the United States of America (stripped securities are only permitted if they have been stripped by the agency itself): (i) direct obligations or fully guaranteed certificates of beneficial ownership of the U.S. Export -Import Bank; (i i) certificates of beneficial ownership of the Farmers Home Administration; (iii) participation certificates of the General Services Administration; (iv) Federal Financing Bank bonds and debentures; (v) guaranteed Title XI financings of the U.S.
Maritime Administration; and (vi) project notes, local authority bonds, new communities debentures and U.S. public housing notes and bonds of the U.S. Department of Housing and Urban Development. “Department of Finance” means the Department of Finance of the State of California. “Depository” means (a) initially, DTC, and (b) any other Securities Depository acting as Depository pursuant to Section 2.10.
“Depository System Participant ” means any participant in the Depository ’s book -entry system.
“Dissolution Act” means California Assembly Bill X1 26 approved by the Governor of the State of California on June 28, 2011, as it has heretofore been amended and as it may hereafter be amended.
“DTC” means The Depository Trust Company, New York, New York, and its successors and assigns.
“Escrow Bank” means The Bank of New York Mellon Trust Company, N.A. “Event of Default” means any of the events described in Section 8.01. “Fair Market Value” means the price at which a willing buyer would purchase the investment from a willing seller in a bona fide, arm’s length transaction (determined as of the date the contract to purchase or sell the investment becomes binding) if the investment is traded on an established securities market (within the meaning of Section 1273 of the Code) and, otherwise, the term “Fair Market Value” means the acquisition price in a bona fide arm ’s length transaction (as referenced above) if (i) the investment is a certificate of depos it that is acquired in accordance with applicable regulations under the Code, (ii) the investment is an agreement with specifically negotiated withdrawal or reinvestment provisions and a specifically negotiated interest rate (for example, a guaranteed investment contract, a forward supply contract or other investment agreement) that is acquired in accordance with applicable regulations under the Code, (iii) the investment is a United States Treasury Security--State and Local Government Series that is acquir ed in accordance with applicable regulations of the United States Bureau of Public Debt, or (iv) any commingled investment fund in which the Successor Agency and 151
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related parties do not own more than a ten percent (10%) beneficial interest therein if the re turn paid by the fund is without regard to the source of the investment. “Federal Securities” means any direct, noncallable general obligations of the United States of America (including obligations issued or held in book -entry form on the books of the Dep artment of the Treasury of the United States of America and CATS and TGRS), or obligations the payment of principal of and interest on which are directly or indirectly guaranteed by the United States of America. “Fiscal Year” means any twelve-month period beginning on July 1 in any year and extending to the next succeeding June 30, both dates inclusive, or any other twelve month period selected and designated by the Successor Agency to the Trustee in writing as its official fiscal year period. “Former Agency” means the Hercules Redevelopment Agency. “Indenture” means this Indenture of Trust by and between the Successor Agency and the Trustee, as originally entered into or as it may be amended or supplemented by any Supplemental Indenture entered into pursuant to the provisions hereof. “Independent Accountant” means any accountant or firm of such accountants duly licensed or registered or entitled to practice as such under the laws of the State, appointed by the Successor Agency, and who, or each of whom:
(a) is in fact independent and not under domination of the Successor Agency or the City;
(b) does not have any substantial interest, direct or indirect, with the Successor Agency or the City; and
(c) is not connected with the Successor Agency or the City as an officer or employee of the Successor Agency or the Cit y, but who may be regularly retained to make reports to the Successor Agency or the City.
“Independent Redevelopment Consultant” means any consultant or firm of such consultants appointed by the Successor Agency, and who, or each of whom:
(a) is judged by the Successor Agency to have experience in matters relating to the collection of Pledged Tax Revenues or otherwise with respect to the financing of redevelopment projects;
(b) is in fact independent and not under domination of the Successor Agency or the City;
(c) does not have any substantial interest, direct or indirect, with the Successor Agency or the City; and
(d) is not connected with the Successor Agency or the City as an officer or employee of the Successor Agency or the City, but who may be regular ly retained to make reports to the Successor Agency or the City.
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“Information Services” means, in accordance with then current guidelines of the Securities and Exchange Commission, such services providing information with respect to the redemption of bonds as the Successor Agency may designate in a Written Request of the Successor Agency filed with the Trustee.
“Insurer” means the 2022 Insurer and, as applicable, the provider of a municipal bond or financial guaranty insurance policy with respect to other Bonds. “Interest Account ” means the account by that name established and held by the Trustee pursuant to Section 4.03(a).
“Interest Payment Date” means each February 1 and August 1, commencing _____ 1, 2022, for so long as any of the Bonds remain Outstanding hereunder. “Law” means the Community Redevelopment Law of the State, constituting Part 1 of Division 24 of the Health and Safety Code of the State, and the acts amendatory thereof and supplemental thereto.
“Maximum Annual Debt Service” means, as of the date of calculation, the largest amount of principal and interest payments due with respect to the current or any future Bond Year payable in such Bond Year. For purposes of such calculation, there shall be excluded payments with respect to each series of Bonds to the extent that amounts due with respect to such series of Bonds are prepaid or otherwise discharged in accordance with this Indenture. “Moody’s” means Moody’s Investors Service and its successors. “Nominee” means (a) initially, Cede & Co., as nominee of DTC, and (b) any other nominee of the Depository designated pursuant to Section 2.10(a).
“Outstanding” when used as of any particular time with reference to Bonds, means (subject to the provisions of Section 9.04) all Bonds except:
(a) Bonds theretofore canceled by the Trustee or surrendered to the Trustee for cancellation;
(b) Bonds paid or deemed to have been paid within the meaning of Section 9.03; and
(c) Bonds in lieu of or in substitution for which other Bonds shall have been authorized, executed, issued and delivered by the Successor Agency pursuant hereto. “Oversight Board” means the Contra Costa County Countywide Oversight Board established pursuant to Section 34179 of the Dissolution Act.
“Owner” or “Bondowner” means, with respect to any Bond, the person in whose name the ownership of such Bond shall be registered on the Registration Books. “Parity Debt” means any additional bonds, loans, advances or indebtedness issued or incurred by the Successor Agency on a parity with the 2022 Bonds pursuant to Section 3.04, whether issued as Bonds under a Supplemental Indenture or issued under a Parity Debt Instrument. 153
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“Parity Debt Instrument” means a resolution, indenture of trust, supplemental indenture of trust, loan agreement, trust agreement or other instrument authorizing the issuance of any Parity Debt, other than a Supplemental Indenture.
“Participating Underwriter” has the meaning ascribed thereto in the Continuing Disclosure Certificate.
“Permitted Investments” means any of the following which, at the time of investment, are legal investments under the laws of the State for the moneys proposed to be invested therein and are in compliance with the Successor Agency’s investment policies then in effect (provided that the Trustee shall be entitled to rely upon any investment direction from the Successor Agency as conclusive certification to the Trustee that investments described therein are legal and are in compliance with the Successor Agency’s investment policies then in effect and are Permitted Investments), but only to the extent the same are acquired at Fair Market Value:
(a) Federal Securities;
(b) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following federal agencies and provided such obligations are backed by the full faith and credit of the United States of America (stripped securities are only permitted if they have been stripped by the agency itself): (i) direct obligations or fully guaranteed certificates of beneficial ownership of the U.S. Export -Import Bank; (ii) certificates of beneficial ownership of the Farmers Home Administration; (iii) Federal Housing Administration debentures; (iv) participation certificates of the General Services Administration; (v) Federal Financing Bank bonds and debentures; (vi) guaranteed mortgage -backed bonds or guaranteed pass -through obligations of Ginnie Mae (formerly known as the Government National Mortgage Association); (vii) guaranteed Title XI financings of the U.S. Maritime Administration; and (viii) project notes, local authority bonds, new communities debentures and U.S. public housing notes and bonds of the U.S. Department of Housing and Urban Development;
(c) Bonds, debentures, notes or other evidence of indebtedness iss ued or guaranteed by any of the following non -full faith and credit U.S. government agencies (stripped securities only as stripped by the agency itself): (i) senior debt obligations of the Federal Home Loan Bank System; (ii) participation certificates and senior debt obligations of the Federal Home Loan Mortgage Corporation; (iii) mortgaged-backed securities and senior debt obligations of Fannie Mae; (iv) senior debt obligations of Sallie Mae (formerly known as the Student Loan Marketing Association); (v) obligations of the Resolution Funding Corporation; and (vi) consolidated system- wide bonds and notes of the Farm Credit System;
(d) Money market mutual funds registered under the Federal Investment Company Act of 1940, whose shares are registered under the Federal Securities Act of 1933, and having a rating by S&P of at least AAAm -G, AAAm or AAm, and a rating by Moody ’s of Aaa, Aa1 or Aa2 (such funds may include those for which the Trustee or an affiliate receives and retains a fee for services provided to the fund, whether as a custodian, transfer agent, investment advisor or otherwise); (e) Unsecured certificates of deposit (having maturities of not more than 365 days) of any bank the short-term obligations of which are rated on the date of purchase “A-1+” or better by S&P and “P-1” by Moody’s and or certificates of deposit (including those of the Trustee, its parent and its affiliates) secured at all times by collateral that may be used by a national bank for purposes of 154
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satisfying its obligations to collateralize pursuant to federal law which are issued by commercial banks, savings and loan associations or mutual savings bank whose short -term obligations are rated on the date of purchase A-1 or better by S&P, Moody’s and Fitch; (f) Certificates of deposit, including those placed by a third party pursuant to an agreement between the Trustee and the Successor Agency , time deposits, deposit ac counts, demand deposits, trust funds, trust accounts, overnight bank deposits, interest -bearing deposits, other deposit products, or bankers acceptances of depository institutions, or interest bearing money market deposits or accounts (including those of the Trustee, its parent and its affiliates) that are fully insured by FDIC, including BIF and SAIF;
(g) Investment agree ments, including guaranteed investment contracts, forward purchase agreements, reserve fund put agreements and collateralized investment agreements with an entity rated “Aa” or better by Moody’s and “AA” or better by S&P, or unconditionally guaranteed by an entity rated “Aa” or better by Moody’s and “AA” or better by S&P; (h) Commercial paper rated, at the time of purchase, “Prime-1” by Moody’s and “A-1+” or better by S&P;
(i) Bonds or notes issued by any state or municipality which are rated by Moody’s and S&P in one of the two highest rating categories assigned by such agencies; (j) Federal funds or bankers acceptances with a maximum term of one year of any bank which has an unsecured, uninsured and ungu aranteed obligation rating of “Prime-1” or “A3” or better by Moody’s, and “A-1+” by S&P; and
(k) The Local Agency Investment Fund that is administered by the California Treasurer for the investment of funds belonging to local agencies within the State of C alifornia, provided that for investment of funds held by the Trustee, the Trustee is entitled to make investments and withdrawals in its own name as Trustee.
Ratings of Permitted Investments shall be determined at the time of purchase of such Permitted Investments and without regard to ratings subcategories. “Pledged Tax Revenues ” means all taxes (i) that were eligible for allocation to the Former Agency with respect to the Project Area and are allocated to the Successor Agency pursuant to Article 6 of Chap ter 6 (commencing with Section 33670) of the Law and Section 16 of Article XVI of the Constitution of the State, or pursuant to other applicable State laws and (ii) that are deposited or available for deposit by the County Auditor-Controller in the Redevelopment Property Tax Trust Fund, all as provided in Section 34172(d) of the Dissolution Act. “Principal Account” means the account by that name established and held by the Trustee pursuant to Section 4.03(b).
“Principal Corporate Trust Office ” means the cor porate trust office of the Trustee in Los Angeles, California, or such other or additional offices as the Trustee may designate in writing to the Successor Agency from time to time as the corporate trust office for purposes of the Indenture; except that with respect to presentation of Bonds for payment or for registration of transfer and exchange, 155
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such term means the office or agency of the Trustee at which, at any particular time, its corporate trust agency business is conducted.
[“Prior Agreement s” means the Successor Agency’s obligations under (i) that certain Disposition, Development and Loan Agreement, dated November 15, 1996, between the Former Agency and Bridge Housing Corporation of Hercules Senior Housing Development and (ii) that certain Settlement Agreement, Mutual General Release and Amendment to Development and Owner Participation Agreement, dated as of April 23, 2010, by and between Hercules LLC, Catellus Residential Group, the City and the Former Agency.]
“Project Area” means the Merged Project Area adopted pursuant to the Redevelopment Plans and Ordinances described in Exhibit B.
“Qualified Reserve Account Credit Instrument ” means (i) the 2022 Reserve Policy , and (ii) an irrevocable standby or direct -pay letter of credit, insurance policy, or surety bond issued by a commercial bank or insurance company and deposited with the Trustee with respect to other Bonds, provided that all of the following requirements are met at the time of acceptance thereof by the Trustee:
(a) S&P or Moody’s have assigned a long-term credit rating to such bank or insurance company at the time of issuance of such Qualified Reserve Account Credit Instrument of “A” (without regard to modifier) or higher; (b) such letter of credit, insurance policy or surety bond has a ter m of at least 12 months; (c) such letter of credit, insurance policy or surety bond has a stated amount at least equal to the portion of the Reserve Requirement with respect to the Bonds with respect to which it is deposited or with respect to which funds are proposed to be released; and (d) the Trustee is authorized pursuant to the terms of such letter of credit, insurance policy or surety bond to draw thereunder an amount equal to any deficiencies which may exist from time to time in the Interest Account or the Principal Account for the purpose of making payments required pursuant to Sections 4.03(a), 4.03(b) or 4.03(c) of this Indenture.
“Recognized Obligation Payment Schedule ” means a Recognized Obligation Payment Schedule, each prepared and approved from time to time pursuant to subdivision (o) of Section 34177 of the California Health and Safety Code.
“Record Date” means, with respect to any Interest Payment Date, the close of business on the fifteenth (15th) calendar day of the month preceding such Interest Payment Date, whether or not such fifteenth (15th) calendar day is a Business Day.
“Redevelopment Obligation Retirement Fund ” means the fund by that name established pursuant to California Health and Safety Code Section 34170.5(a) and administered by the Successor Agency.
“Redevelopment Plan ” means the Redevelopment Plan for the Project Area described in Exhibit B, as such Redevelopment Plan has heretofore been amended and as it may hereafter be amended in accordance with the law.
“Redevelopment Project” means the undertaking of the Successor Agency pursuant to the Redevelopment Plan and the Law for the redevelopment of the Project Area. 156
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“Redevelopment Property Tax Trust Fund” and “RPTTF” mean the fund by that name established pursuant to California Health & Safety Code Sections 34170.5( b) and 34172(c) and administered by the County Auditor-Controller.
“Refunded Obligations” means, collectively, the 2005 Bonds, the 2007 Bo nds, the 2007A Housing Bonds and the 2007B Housing Bonds.
“Refunding Law” means Article 11 (commencing with Section 53580) of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code of the State, and the acts amendatory thereof and supplemented thereto.
“Registration Books” means the records maintained by the Trustee pursuant to Section 2.08 for the registration and transfer of ownership of the Bonds. “Report” means a document in writing signed by an Independent Redevelopment Consultant and including:
(a) a statement that the person or firm making or giving such Report has read the pertinent provisions of this Indenture to which such Report relates; (b) a brief statement as to the nature and scope of the examination or investigation upon which the Report is based; and
(c) a statement that, in the opinion of such person or firm, sufficient examination or investigation was made as is necessary to enable said consultant to express an informed opinion with respect to the subject matter referred to in the Report. “Reserve Account ” means the account by that name established and held by the Trustee pursuant to Section 4.03(c).
“Reserve Requirement” means, subject to Section 4.03(c) of this Indenture, with respect to the 2022 Bonds or any series (or multiple series) of Parity Debt for which a debt service reserve account or fund is to be funded and as of any date of computation, the lesser of:
(i) 125% of the average Annual Debt Service with respect to such series (or multiple series) of Bonds,
(ii) Maximum Annual Debt Service with respect to such series (or multiple series) of Bonds, or
(iii) with respect to such series (or multiple series) of Bonds, 10% of the original principal amount of such series (or multiple series) of Bonds (or, if such series (or multiple series) of Bonds has more than a de minimis amount of original issue discount or premium, 10% of the issue price of such series (or multiple series) of Bonds);
provided, that in no event shall the Successor Agency, in connection with th e issuance or incurrence of Parity Debt be obligated to deposit an amount in the Reserve Account which is in excess of the amount permitted by the applicable provisions of the Code to be so deposited from the proceeds of tax- exempt bonds without having to restrict the yield of any investment purchased with any portion of such deposit and, in the event the amount of any such deposit into the Reserve Account is so limited, the 157
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Reserve Requirement shall, in connection with the issuance of such Parity Debt, be increased only by the amount of such deposit as permitted by the Code; and, provided further that the Successor Agency may meet all or a portion of the Reserve Requirement by depositing a Qualified Reserve Account Credit Instrument meeting the requirements of Section 4.03(c) hereof. For the avoidance of doubt, the Reserve Requirement for any Bonds may, at the option and instruction of the Successor Agency, be determined on a combined or standalone basis. As of the Closing Date, the Reserve Requirement for the 2022 Bonds is $__________; the Reserve Requirement for the 2022 Bonds shall not increase following the Closing Date. The Trustee shall not be under any obligation to determine or compute whether or to what extent any amount on deposit or required to b e on deposit in the Reserve Account in connection with an issuance of Parity Debt is in excess of the amount permitted by applicable provisions of the Code to be so deposited without yield restriction, as provided in this definition. “ROPS Period ” means ea ch annual period beginning on July 1 of any calendar year and ending on June 30 of the next calendar year, or such other period as provided in the Dissolution Act. “S&P” means S&P Global Ratings, a Standard & Poor’s Financial Services LLC business, or any successor thereto.
“Securities Depositories ” means The Depository Trust Company, New York, New York 10041-0099, Fax-(212) 855-7232; or, in accordance with then current guidelines of the Securities and Exchange Commission, such other addresses and/or such other securities depositories as the Successor Agency may designate in a Written Request of the Successor Agency delivered to the Trustee. “Special Fund ” means the fund held by the Successor Agency established within the Redevelopment Obligation Retirement Fund pursuant to Section 4.02. “State” means the State of California.
“Supplemental Indenture ” means any supplement to this Indenture which has been duly adopted or entered into by the Successor Agency, but only if and to the extent that such Supplemental Indenture is specifically authorized hereunder.
“Trustee” means The Bank of New York Mellon Trust Company, N.A., as trustee hereunder, or any successor thereto appointed as trustee hereunder in accordance with the provisions of Article VI. “Written Request of the Successor Agency ” or “Written Certificate of the Successor Agency” means a request or certificate, in writing signed by the Executive Director or Finance Director of the Successor Agency, or the designee of either, or by any other officer of the Successor Agency or the City duly authorized by the Successor Agency for that purpose. “2005 Bonds” means the Hercules Redevelopment Agency, Hercules Merged Project Area, Tax Allocation Bonds, Series 2005.
“2005 Bonds Escrow Agreement” means that certain Escrow Agreement (2005 Bonds) dated as of _____ 1, 2022, by and between the Successor Agency and the Escrow Bank, relating to the 2005 Bonds.
“2007 Bonds” means the Hercules Redevelopment Agency, Hercules Merged Project Area, Tax Allocation Bonds, 2007 Series A.
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“2007 Bonds Escrow Agreement” means that certain Escrow Agreement (2007 Bonds) dated as of _____ 1, 2022, by and between the Successor Agency and the Escrow Bank, relating to the 2007 Bonds.
“2007A Housing Bonds” means the Hercules Redevelopment Agency, Hercules Merged Project Area, Housing Tax Allocation Bonds, 2007 Series A (Taxable). “2007A Housing Bonds Escrow Agreement” means that certain Escrow Agreement (2007A Housing Bonds) dated as of _____ 1, 2022, by and between the Successor Agency and the Escrow Bank, relating to the 2007A Housing Bonds.
“2007B Housing Bonds” means the Hercules Rede velopment Agency, Hercules Merged Project Area, Housing Tax Allocation Bonds, 2007 Series B. “2007B Housing Bonds Escrow Agreement” means that certain Escrow Agreement (2007B Housing Bonds) dated as of _____ 1, 2022, by and between the Successor Agency and the Escrow Bank, relating to the 2007B Housing Bonds.
“2022 Bonds” means, collectively, the 2022A Bonds and the 2022B Bonds. “2022A Bonds” means the $ __________ initial aggregate principal amount of Successor Agency to the Hercules Redevelopment Agency Tax Allocation Refunding Bonds, Series 2022A. “2022B Bond s” means the $ __________ initial aggregate principal amount of Successor Agency to the Hercules Redevelopment Agency Tax Allocation Refunding Bonds, Series 2022B (Federally Taxable).
[“2022 Insurance Policy” means the insurance policy issued by the 2022 Insurer guaranteeing the scheduled payment of principal of and interest on the 2022 Bonds when due.] [“2022 Insurer” means __________, or any successor thereto or assignee thereof.] [“2022 Reserve Policy” means the Municipal Bond Debt Service Reserve Insurance Policy issued by the 2022 Insurer guaranteeing certain payments into the Reserve Account with respect to the 2022 Bonds as provided therein and subject to the limitation set forth therein.] Section 1.03 Rules of Construction. All references herein to “Articles,” “Sections” and other subdivisions are to the corresponding Articles, Sections or subdivisions of this Indenture, and the words “herein,” “hereof,” “hereunder” and other words of similar import refer to t his Indenture as a whole and not to any particular Article, Section or subdivision hereof.
ARTICLE II
AUTHORIZATION AND TERMS
Section 2.01 Authorization of 2022 Bonds. Two initial series of Bonds are hereby authorized to be issued by the Successor Agency under and subject to t he terms of this Indenture, the Refunding Law, the Dissolution Act and the Law. This Indenture constitutes a continuing agreement with the Owners of all of the Bonds issued or to be issued hereunder and then Outstanding to secure the full and final payment of principal and redemption premiums (if any) and the interest on all Bonds which 159
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may from time to time be executed and delivered hereunder, subject to the covenants, agreements, provisions and conditions herein contained. Such initial issue s of Bonds shall be designated the “Successor Agency to the Hercules Redevelopment Agency Tax Allocation Refunding Bonds, Series 2022A,” issued in the initial aggregate principal amount of $__________, and the “Successor Agency to the Hercules Redevelopment Agency Tax Allocation Refunding Bonds, Series 2022B (Federally Taxable),” issued in the initial aggregate principal amount of $__________.
Section 2.02 Terms of 2022 Bonds.
(a) The 2022A Bonds shall be issued in fully registered form without coupons.
The 2022A Bonds shall be issued in denominations of $5,000 or any integral multiple thereof, so long as no 2022A Bond shall have more than one maturity date. The 2022A Bonds shall be dated as of their Closing Date. The 2022A Bonds shall be lettered and numbered as the Participating Underwriter shall prescribe.
The 2022A Bonds shall mature and shall bear interest (calculated on the basis of a 360 -day year comprised of twelve 30-day months) at the rate per annum as follows:
Maturity Date
(August 1)
Principal
Amount
Interest
Rate
(b) The 2022B Bonds shall be issued in fully registered form without coupons.
The 2022B Bonds shall be issued in denominations of $5,000 or any integral multiple thereof, so long as no 2022B Bond shall have more than one maturity date. The 2022B Bonds shall be dated as of their Closing Date. The 2022B Bonds shall be lettered and numbered as the Participating Underwriter shall prescribe.
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The 2022B Bonds shall mature and shall bear interest (calculated on the basis of a 360 -day year comprised of twelve 30-day months) at the rate per annum as follows:
Maturity Date
(August 1)
Principal
Amount
Interest
Rate
(c) Each 2022 Bond shall bear interest from the Interest Payment Date next preceding the date of authentication thereof, unless (a) it is authenticated after a Record Date and on or before the following Interest Payment Date, in which event it shall bear i nterest from such Interest Payment Date; or (b) it is authenticated on or before _____ 15, 2022, in which event it shall bear interest from its Closing Date; provided, however, that if, as of the date of authentication of any 2022 Bond, interest thereon is in default, such 2022 Bond shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment thereon.
Interest on the 2022 Bonds (including the final interest payment upon maturity or redemption) is payable when due by wire or check of the Trustee mailed on the Interest Payment Date to the Owner thereof at such Owner’s address as it appears on the Registration Books at the close of business on the preceding Record Date; provided that at the written request of the Owner of at least $1,000,000 aggregate principal amount of 2022 Bonds, which written request is on file with the Trustee as of any Record Date, interest on such 2022 Bonds shall be paid on the succeeding Interest Payment Date by wire to such account in the United States as shall be specified in such written request. The principal of the 2022 Bonds and premium, if any, upon redemption, are payable in lawful money of the United States of America upon presentation and surrender thereof at the P rincipal Corporate Trust Office of the Trustee.
Section 2.03 Redemption of 2022 Bonds.
(a) Optional Redemption of 2022A Bonds. The 2022A Bonds maturing on or prior to August 1, 20__ are not subject to optional redemption. The 2022A Bonds maturing on or after August 1, 20__, are subject to optional redemption prior to their respective maturity dates as a whole, or in part by lot, on any date on or after August 1, 20__, by such maturity or maturities as shall be directed by the Successor Agency (or in absence of such dire ction, pro rata by maturity and by lot within a maturity), from any source of available funds. Such optional redemption shall be at a redemption price equal to 100% of the principal amount to be redeemed, plus accrued but unpaid interest to the date fixed for redemption, without premium. Any such optional redemption of the 161
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2022A Bonds shall be at the election of the Successor Agency, which shall give written notice thereof to the Trustee (which notice shall include the principal amount of 2022A Bonds to b e optionally redeemed together with the redemption date) no later than five (5) Business Days prior to the date when the Trustee is required to give notice of such optional redemption pursuant to Section 2.03(e). (b) Optional Redemption of 2022B Bonds. The 2022B Bonds maturing on or prior to August 1, 20__ are not subject to optional redemption. The 2022B Bonds maturing on or after August 1, 20__, are subject to optional redemption prior to their respective maturity dates as a whole, or in part by lot, on a ny date on or after August 1, 20__, by such maturity or maturities as shall be directed by the Successor Agency (or in absence of such direction, pro rata by maturity and by lot within a maturity), from any source of available funds. Such optional redempt ion shall be at a redemption price equal to 100% of the principal amount to be redeemed, plus accrued but unpaid interest to the date fixed for redemption, without premium. Any such optional redemption of the 2022B Bonds shall be at the election of the Su ccessor Agency, which shall give written notice thereof to the Trustee (which notice shall include the principal amount of 2022B Bonds to be optionally redeemed together with the redemption date) no later than five (5) Business Days prior to the date when the Trustee is required to give notice of such optional redemption pursuant to Section 2.03(e). (c) Mandatory Sinking Fund Redemption of 2022A Bonds . The 2022A Bonds maturing August 1, 20__ and August 1, __ (the “ 2022A Term Bonds”) shall also be subject to mandatory redemption in whole, or in part by lot, on August 1 in each year, c ommencing August 1, 20__ and August 1, 20__, respectively, as set forth below, from sinking fund payments made by the Successor Agency to the Principal Account pursuant to Section 4.03(b), at a redemption price equal to the principal amount thereof to be redeemed, without premium, in the aggregate respective principal amounts and on August 1 in the respective years as set forth in the following tables; provided however, that (y) in lieu of redemption thereof such 2022A Term Bonds may be purchased by the Successor Agency pursuant to Section 2.03(k), and (z) if some but not all of such 2022A Term Bonds have been redeemed pursuant to subsection (a) above, the total amount of all future sinking fund payments shall be reduced by the aggregate principal amount of such 2022A Term Bonds so redeemed, to be allocated among such sinking fund payments in integral multiples of $5,000 as determined by the Successor Agency (written notice of which determination shall be given by the Successor Agency to the Trustee and shall include a revised sinking fund schedule).
2022A Term Bonds of 20__
August 1 Principal Amount
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2022A Term Bonds of 20__
August 1 Principal Amount
(d) Mandatory Sinking Fund Redemption of 2022 B Bonds. The 2022B Bonds maturing August 1, 20__ and August 1, __ (the “ 2022B Term Bonds”) shall also be subject to mandatory redemption in whole, or in part by lot, on August 1 in each year, commencing August 1, 20__ and August 1, 20__, respectively, as set forth below, from sinking fund payments made by the Successor Agency to the Principal Account pursuant to Section 4.03(b), at a redemption price equal to the principal amount thereof to be redeemed, without premium, in the aggregate respective principal amounts and on August 1 in the respective years as set forth in the following tables; provided however, that (y) in lieu of redemption thereof such 2022B Term Bonds may be purchased by the Successor Agency pursuant to Section 2.03(k), and (z) if some but not all of such 2022B Term Bonds have been redeemed pursuant to subsection (a) above, the total amount of all future sinking fund payments shall be reduced by the aggregate principal amount of such 2022B Term Bonds so redeemed, to be allocated among such sinking fund payments in integral multiples of $5,000 as determined by the Successor Agency (written notice of which determination shall be given by the Successor Agency to the Trustee and shall include a revised sinking fund schedule).
2022B Term Bonds of 20__
August 1 Principal Amount
2022B Term Bonds of 20__
August 1 Principal Amount
(e) Notice of Redemption; Rescission. Subject to its timely receipt of notice from the Successor Agency of its election to optionally redeem the 2022 Bonds, in the case of an optional redemption pursuant to Section 2.03(a) or Section 2.03(b), the Trustee on behalf and at the expense of the Successor Agency shall mail (by first class mail, postage prepaid) notice of any redemption at least twenty (20) but not more than sixty (60) days prior to the redemption date, (i) to any Insurer and to the Owners of any Bonds designated for redemption at their respective addresses appearing on the 163
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Registration Books, and (ii) to the Securities Depositories and one or more Information Services designated in a Written Request of the Successor Agency filed with the Trustee; but such mailing shall not be a condition precedent to such redemption and neither failure to receive any such notice nor any defect therein shall affect the validity of the proceedings for the redemption of such Bonds or the cessation of the accrual of interest thereon. Such notice shall state the redemption date and the redemption price, shall state, in the case of a redemption pursuant to (a) or (b) above, that such redemption is conditioned upon the timely delivery of the redemption price by the Successor Agency to the Trustee for deposit in the Redemption Account, shall designate the CUSIP number of the Bonds to be redeemed, shall state the individual number of each Bond to be redeemed or shall state that all Bonds between two stated numbers (both inclusive) or all of the Bonds Outstanding are to be redeemed, and shall require that such Bonds be then surrendered at the Principal Corporate Trust Office of the Trustee for redemption at the redemption price, giving notice also that (subject to timely delivery of the redemption price by the Successor Agency to the Trustee for deposit in the Redemption Account) further interest on such Bonds will not accrue from and after the redemption date, and that such notice of optional redemption shall be canceled and annulled if for any reason funds will not be or are not available on the date fixed for redemption, as provided in Section 2.03(f). (f) The Successor Agency shall have the right to rescind any notice of optional redemption by written notice to the Trustee on or prior to the date fixed for redemption and such rescission shall not constitute an Event of Default under this Indenture . Any such notice of optional redemption shall be canceled and annulled if for any reason funds will not be or are not available on the date fixed for redemption for the payment in full of the Bonds then called for redemption, and such cancellation shall not constitute an Event of Default under this Indenture. The Successor Agency and the Trustee shall have no liability to the Owners or any other party related to or arising from any such rescission or canc ellation of redemption. The Trustee shall mail notice of such rescission of redemption in the same manner and to the same recipients as the original notice of redemption was sent.
(g) Upon the payment of the redemption price of Bonds being redeemed, each check or other transfer of funds issued for such purpose shall, to the extent practicable, bear the CUSIP number identifying, by issue and maturity, the Bonds being redeemed with the proceeds of such check or other transfer.
(h) Partial Redemption of Bonds. In the event only a portion of any Bond is called for redemption, then upon surrender of such Bond the Successor Agency shall execute and the Trustee shall authenticate and deliver to the Owner thereof, at the expense of the Successor Agency, a new Bond or Bond s of the same interest rate and maturity, of authorized denominations, in aggregate principal amount equal to the unredeemed portion of the Bond to be redeemed. (i) Effect of Redemption. From and after the date fixed for redemption, if funds available for the payment of the redemption price of and interest on the Bonds so called for redemption shall have been duly deposited with the Trustee, such Bonds so called shall cease to be entitled to any benefit under this Indenture other than the right to receive payment of the redemption price and accrued interest to the redemption date, and no interest shall accrue thereon from and after the redemption date specified in such notice.
(j) Manner of Redemption . Whenever any Bonds or portions thereof are to be selected for redemption by lot, the Trustee shall make such selection, in such manner as the Trustee shall deem appropriate, and shall notify the Successor Agency thereof to the extent Bonds are no longer 164
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held in book-entry form. In the event of redemption by lot of B onds, the Trustee shall assign to each Bond then Outstanding a distinctive number for each $5,000 of the principal amount of each such Bond. The Bonds to be redeemed shall be the Bonds to which were assigned numbers so selected, but only so much of the principal amount of each such Bond of a denomination of more than $5,000 shall be redeemed as shall equal $5,000 for each number assigned to it and so selected. All Bonds redeemed or purchased pursuant to this Section 2.03 shall be cancelled and destroyed. (k) Purchase in Lieu of Redemption. In lieu of redemption of the Bonds, amounts on deposit in the Special Fund or in the Principal Account may also be used and withdrawn by the Successor Agency and the Trustee, respectively, at any time, upon the Written Request of the Successor Agency, for the purchase of the Bonds at public or private sale as and when and at such prices (including brokerage and other charges, but excluding accrued interest, which is payable from the Interest Account) as the Successor Agency may in its discretion determine. The par amount of any Bonds so purchased by the Successor Agency in any twelve-month period ending on July 1 in any year shall be credited towards and shall reduce the par amount of the Bonds required to be redeemed pursuant to a Supplemental Indenture on August 1 in each year; provided that evidence satisfactory to the Trustee of such purchase has been delivered to the Trustee by said July 1.
Section 2.04 Form of 2022 Bond s. The 2022 Bond s, the form of Trustee ’s Certificate of Authentication, and the form of Assignment to appear thereon, shall be substantially in the form set forth in Exhibit A, which is attached hereto and by this reference incorporated herein, with necessary or appropriate variations, omissions and insertions, as permitted or required by this Indenture.
Section 2.05 Execution of Bonds. The Bonds shall be executed on behalf of the Successor Agency by the signature of its Executive Director or his or her written designee and the signature of its Secretary who are in office on the date of execution and delivery of this Indenture or at any time thereafter. If any officer whose signature appears on any Bond ceases to be such officer before delivery of the Bonds to the purchaser, such signature shall nevertheles s be as effective as if the officer had remained in office until the delivery of the Bonds to the purchaser. Any Bond may be signed and attested on behalf of the Successor Agency by such persons as at the actual date of the execution of such Bond shall be the proper officers of the Successor Agency although on the date of such Bond any such person shall not have been such officer of the Successor Agency.
Only such of the Bonds as shall bear thereon a Certificate of Authentication in the form hereinbefore set forth, executed and dated by the Trustee, shall be valid or obligatory for any purpose or entitled to the benefits of this Indenture, and such Certificate shall be conclusive evidence that such Bonds have been duly authenticated and delivered hereunder and are entitled to the benefits of this Indenture.
Signatures on the Bonds on behalf of the Successor Agency required by this Section may be made manually or may be affixed by facsimile thereof.
Section 2.06 Transfer of Bonds. Any Bond may, in accordance with its terms, be transferred, upon the Registration Books, by the person in whose name it is registered, in person or by a duly authorized attorney of such person, upon surrender of such Bond to the Trustee at its Principal Corporate Trust Office for cancellation, accompanied by delivery of a written instrument of transfer in a form acceptable to the Trustee, duly executed. Whenever any Bond shall be surrendered for transfer, the Successor Agency shall execute and the Trustee shall thereupon authenticate and deliver to the transferee a new Bond or Bonds of like series, tenor, maturity and aggregate principal amount of 165
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authorized denominations. The Holder requesting such transfer shall as a condition precedent to the exercise of the privilege of making such transfer remit to the Trustee an amount sufficient to pay any tax or other governmental charge required to be paid with respect to such transfer. The cost of printing Bonds and any services rendered or expenses incurred by the Trustee in connection with any transf er shall be paid by the Successor Agency.
The Trustee may refuse to transfer, under the provisions of this Section 2.06, either (a) any Bonds during the period fifteen (15) days prior to the date established by the Trustee for the selection of Bonds for redemption, or (b) any Bonds selected by the Trustee for redemption. The Trustee may further require all information it deems necessary to allow the Trustee to comply with any applicable reporting or withholding obligations under the Code. The Trustee may rely on the information provided to it and shall have no responsibility to verify or ensure the accuracy of such information. To the extent any such information is not timely provided or is incomplete or inaccurate in any respect, the Trustee will be entitled to report or withhold on any payments hereunder, without liability, to the extent it determines in its discretion such reporting or withholding, as applicable, is required under the Code.
Prior to any transfer of the Bonds outside the book-entry system (including, but not limited to, the initial transfer outside the book-entry system) the transferor shall provide or cause to be provided to the Trustee all information necessary to allow the Trustee to comply with any applicable tax reporting obligations, including without limitation any cost basis reporting obligations under Internal Revenue Code Section 6045, as amended. The Trustee shall conclusively rely on the information provided to it and shall have no responsibility to verify or ensure the accuracy of such information.
Section 2.07 Exchange of Bonds. Bonds may be exchanged at the Principal Corporate Trust Office of the Trustee for Bonds of the same series, tenor and maturity and of other authorized denominations.
The Holder requesting such exchange shall as a condition precedent to the exercise of the privilege of making such exchange remit to the Trustee an amount sufficient to pay any tax or other governmental charge required to be paid with respect to such exchange. The cost of printing Bonds and any services rendered or expenses incurred by the Trustee in connection with any exchange shall be paid by the Successor Agency.
The Trustee may refuse to exchange, under the provisions of this Section 2.07, either (a) any Bonds during the fifteen (15) days prior to the date established by the Trustee for the selection of Bonds for redemption or (b) any Bonds selected by the Trustee for redemption. The Trustee may further require all information it deems necessary to allow the Trustee to comply with any applicable reporting or withholding obligations under the Code. The Trustee may rely on the information provided to it and shall have no responsibility to verify or ensure the accuracy of such information. To the extent any such information is not timely provided or is incomplete or inaccurate in any respect, the Trustee will be entitled to report or withhold on any payments hereunder, without liability, to the extent it determines in its discretion such reporting or withholding, as applicable, is required under the Code.
Section 2.08 Registration of Bonds . The Trustee will keep or cause to be kept, at its Principal Corporate Trust Office, sufficient records for the registration and registration of transfer of the Bonds, which shall at all times during normal business hours be open to inspection and copying by the Successor Agency, upon reasonable prior notice to the Trustee; and, upon presentation for such purpose, the Trustee shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on the Registration Books Bonds as hereinbefore provided. 166
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Section 2.09 Bonds Mutilated, Lost, Destroyed or Stolen . If any Bond shall become mutilated, the Successor Agency, at the expense of the Owner of such Bond, shall execute, and the Trustee shall thereupon authenticate and deliver, a new Bond of like tenor and amount in exchange and substitution for the Bond so mutilated, but only upon surrender to the Trustee of the Bond so mutilated. Every mutilated Bond so surrendered to the Trustee shal l be canceled by it. If any Bond shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Trustee and, if such evidence be satisfactory to the Trustee and Successor Agency and indemnity satisfactory to the Trustee and Successor Agency shall be given, the Successor Agency, at the expense of the Owner, shall execute, and the Trustee shall thereupon authenticate and deliver, a new Bond of like tenor and amount in lieu of and in substitution for the Bond so lost, destroyed or stolen (or if any such Bond has matured or has been called for redemption, instead of issuing a substitute Bond, the Trustee may pay the same without surrender thereof upon receipt of indemnity satisfactory to the Trustee and the Successor Agency). The Successor Agency may require payment by the Owner of a sum not exceeding the actual cost of preparing each new Bond issued under this Section 2.09 and of the expenses which may be incurred by the Successor Agency and the Trustee in the premises. Any Bond issued under the provisions of this Section in lieu of any Bond alleged to be lost, destroyed or stolen shall constitute an original additional contractual obligation on the part of the Successor Agency whether or not the Bond so alleged to be l ost, destroyed or stolen be at any time enforceable by anyone, and shall be equally and proportionately entitled to the benefits of this Indenture with all other Bonds issued pursuant to this Indenture.
Section 2.10 Book-Entry System.
(a) Original Delivery . The Bonds shal l be initially delivered in the form of a separate single fully registered Bond without coupons (which may be typewritten) for each maturity of the Bonds. Upon initial delivery, the ownership of each such Bond shall be registered on the Registration Books in the name of the Nominee. Except as provided in subsection (c), the ownership of all of the Outstanding Bonds shall be registered in the name of the Nominee on the Registration Books.
With respect to Bonds the ownership of which shall be registered in the name of the Nominee, neither the Successor Agency nor the Trustee shall have any responsibility or obligation to any Depository System Participant or to any person on behalf of which the Depository System Participant holds an interest in the Bonds. Without limiting the generality of the immediately preceding sentence, neither the Successor Agency nor the Trustee shall have any responsibility or obligation with respect to (i) the accuracy of the records of the Depository, the Nominee or any Depository S ystem Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any Depository System Participant or any other person, other than a Bondowner as shown in the Registration Books, of any notice with respect to the Bonds, including any notice of redemption, (iii) the selection by the Depository of the beneficial interests in the Bonds to be redeemed in the event the Successor Agency elects to redeem the Bonds in part, (iv) the payment to any Depository System Participant or any other person, other than a Bondowner as shown in the Registration Books, of any amount with respect to principal, premium, if any, or interest on the Bonds or (v) any consent given or other action taken by the Depository as Owner of the Bonds. The Successor Agency and the Trustee may treat and consider the person in whose name each Bond is registered as the absolute owner of such Bond for the purpose of payment of principal, premium and interest on such Bond, for the purpose of giving notices of redemption and other matters with respect to such Bond, for the purpose of registering transfers of ownership of such Bond, and for all other purposes whatsoever. The Trustee shall pay the principal of and interest and premium, if any, on the Bonds only to the respecti ve Owners or their respective 167
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attorneys duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge all obligations with respect to payment of principal of and interest and premium, if any, on the Bonds to the extent of the sum or sums so paid. No person other than a Bondowner shall receive a Bond evidencing the obligation of the Successor Agency to make payments of principal, interest and premium, if any, pursuant to this Indenture. Upon delivery by the Depository to the Nominee of written notice to the effect that the Depository has determined to substitute a new nominee in its place, and subject to the provisions herein with respect to Record Dates, such new nominee shall become the Nominee hereunder for all purposes; and upon receipt of such a notice the Successor Agency shall promptly deliver a copy of the same to the Trustee.
(b) Representation Letter. In order to qualify the Bonds for the Depository’s book- entry system, the Successor Agency shall execute and deliver to such Depository a letter representing such matters as shall be necessary to so qualify the Bonds. The execution and delivery of such letter shall not in any way limit the provisions of subsection (a) above or in any other way impose upon the Successor Agency or the Trustee any obligation whatsoever with respect to persons having interests in the Bonds other than the Bondowners. The Trustee agrees to comply with all provisions in such letter with respect to the giving of notices thereunder by the Trustee. In addition to the execution and delivery of such letter, upon written request of the Depository or the Trustee, the Successor Agency may take any other actions, not inconsistent with this Indenture, to qualify the Bonds for the Depository’s book- entry program.
(c) Transfers Outside Book -Entry System . In the event that either (i) the Depository determines not to continue to act as Depository for the Bonds, or (ii) the Successor Agency determines to terminate the Depository as such, then the Successor Agency shall thereupon discontinue the book-entry system with such Depository. In such event, the Depository shall cooperate with the Successor Agency and the Trustee in the issuance of replacement Bonds by providing the Trustee with a list showing the interests of the Depository System Participants in the Bonds, and by surrendering the Bonds, registered in the name of the Nominee, to the Trustee on or before the date such replacement Bonds are to be issued. The Depository, by accepting delivery o f the Bonds, agrees to be bound by the provisions of this subsection (c). If, prior to the termination of the Depository acting as such, the Successor Agency fails to identify another Securities Depository to replace the Depository, then the Bonds shall n o longer be required to be registered in the Registration Books in the name of the Nominee, but shall be registered in whatever name or names the Owners transferring or exchanging Bonds shall designate, in accordance with the provisions of this Article II. Prior to its termination, the Depository shall furnish the Trustee with the names and addresses of the Depository System Participants and respective ownership interests thereof. (d) Payments to the Nominee . Notwithstanding any other provision of this Indenture to the contrary, so long as any Bond is registered in the name of the Nominee, all payments with respect to principal of and interest and premium, if any, on such Bond and all notices with respect to such Bond shall be made and given, respectively, as provided in the letter described in subsection (b) of this Section or as otherwise instructed by the Depository.
Section 2.11 Applicability of Provisions to Parity Debt . Unless otherwise provided in a Supplemental Indenture, the provisions of subdivisions ( e) through (k) of Section 2.03 and Sections 2.05 through 2.10 shall apply to all Bonds unless otherwise provided in a Parity Debt Instrument or Supplemental Indenture.
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ARTICLE III
DEPOSIT AND APPLICATION; ADDITIONAL DEBT
Section 3.01 Issuance of Bonds. Upon the execution and delivery of this Indenture, the Successor Agency shall execute and deliver to the Trustee the 2022A Bonds in the aggregate principal amount of $__________ and the 2022B Bonds in the aggregate principal amount of $__________ and the Trustee shall authenticate and deliver the 2022 Bonds upon the Written Request of the Successor Agency.
Section 3.02 Application of Proceeds of Sale and Certain Other Amounts. (a) On the Closing Date the proceeds of sale of the 2022A Bonds received by the Trustee shall be applied as follows:
(i) The Trustee shall deposit the amount of $ __________ in the 2022A Account of the Costs of Issuance Fund.
(ii) The Trustee shall transfer $__________ to the Escrow Bank for deposit into the escrow fund established under the 2005 Bonds Escrow Agreement. (iii) The Trustee shall transfer $__________ to the Escrow Bank for deposit into the escrow fund established under the 2007 Bonds Escrow Agreement. (iv) The Trustee shall transfer $__________ to the Escrow Bank for deposit into the escrow fund established under the 2007B Housing Bonds Escrow Agreement. (b) On the Closing Date the proceeds of sale of the 2022B Bonds received by the Trustee shall be applied as follows:
(i) The Trustee shall deposit the amount of $ __________ in the 2022B Account of the Costs of Issuance Fund.
(ii) The Trustee shall transfer $__________ to the Escrow Bank for deposit into the escrow fund established under the 2007A Housing Bonds Escrow Agreement.
The Trustee may establish and maintain for so long as is necessary one or more te mporary funds and accounts (or sub-accounts) under this Indenture, including but not limited to a temporary fund for holding the proceeds of the Bonds.
Section 3.03 Costs of Issuance Fund. There is hereby established a separate fund to be known as the “Costs of Issuance Fund” and a 2022A Account and a 2022B Account therein, which shall be held by the Trustee in trust. The moneys in the Costs of Issuance Fund shall be used and withdrawn by the Trustee from time to time to pay the Costs of Issuance with respect to the 2022 Bonds upon submission of a Written Request of the Successor Agency stating the person to whom payment is to be made, the amount to be paid, the purpose for which the obligation was incurred and that such payment is a proper charge against said fu nd. Each such Written Request of the Successor Agency shall be sufficient evidence to the Trustee of the facts stated therein and the Trustee shall have no duty to confirm the accuracy of such facts and shall be fully protected in relying thereon . On the date which is six (6) months following the Closing Date with respect to the 2022 Bonds, or upon the earlier Written Request of the Successor Agency, all amounts (if any) remaining in the 2022A Account of the Costs of Issuance 169
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Fund shall be withdrawn therefrom by the Trustee and transferred to the 2022A Account of the Interest Account within the Debt Service Fund, all amounts (if any) remaining in the 2022B Account of the Costs of Issuance Fund shall be withdrawn therefrom by the Trustee and transferred to the 2022B Account of the Interest Account with in the Debt Service Fund, and the Costs of Issuance Fund and accounts therein shall be closed.
Section 3.04 Issuance of Parity Debt. In addition to the 2022 Bonds, the Successor Agency may issue Parity Debt to refund any o utstanding 2022 Bond s, Parity Debt or the Prior Agreements for savings, in such principal amount as shall be determined by the Successor Agency. The Successor Agency may issue and deliver any such Parity Debt subject to the following specific conditions a ll of which are hereby made conditions precedent to the issuance and delivery of such Parity Debt:
(a) No Event of Default hereunder and no event of default under any Parity Debt Instrument shall have occurred and be continuing unless cured by the issuance of such Parity Debt; (b) The Parity Debt shall be issued to provide savings to the Successor Agency in compliance with Health and Safety Code Section 34177.5(a); (c) A Supplemental Indenture or Parity Debt Instrument shall have been adopted which shall (i) state the applicable reserve requirement and the amount, if any, to be deposited from the proceeds of sale of such Parity Debt in a separate account of the Reserve Account or other debt service reserve account or fund as provided in such Supplemental Indenture or Parity Debt Instrument, to be held as separate security for such series of Parity Debt; (ii) designate accounts and subaccounts within the Debt Service Fund , including within the Reserve Account if applicable , to be used in connection with such Parity De bt; and (iii) set forth such other provisions that are appropriate or necessary and are not inconsistent with the provisions hereof; (d) With respect to Parity Debt issued to refund all or a portion of the Prior Agreements, the Pledged Tax Revenues for the th en current Fiscal Year plus, at the option of the Successor Agency, the Additional Allowance as set forth in a Written Certificate of the Successor Agency filed with the Trustee, shall be equal to [one hundred twenty -five percent (125%) ] of Maximum Annual Debt Service on all Bonds and Parity Debt (including any Policy Costs owed to the 2022 Insurer) which will be Outstanding following the issuance of such Parity Debt; and (e) The Successor Agency shall deliver to the Trustee a Written Certificate of the Successor Agency certifying that the conditions precedent to the issuance of such Parity Debt set forth above have been satisfied.
Section 3.05 Issuance of Subordinate Debt . Notwithstanding the foregoing, no provision herein shall prevent the Successor Agency from issuing ad ditional bonds or incurring other loans, advances or indebtedness payable from Pledged Tax Revenues on a subordinate basis to the 2022 Bonds and Parity Debt.
ARTICLE IV
SECURITY OF BONDS; FLOW OF FUNDS
Section 4.01 Security of Bonds; Equal Security . Subject to the provisions o f Section 4.02 and Section 6.06 hereof allowing for the application of Pledged Tax Revenues, all Pledged Tax Revenues 170
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and the Redevelopment Obligation Retirement Fund, including the Special Fund therein , and all amounts in the Redevelopment Property Tax Trust Fund are irrevocably pledged under this Indenture to secure the payment of the principal of and interest on the 2022 Bonds and all Parity Debt without preference or priority for series, issue, number, dated date, sale date, date of execution or date of delivery. Such pledge shall constitute a lien on and security interest in the Pledged Tax Revenues and the Redevelopment Obligation Retirement Fund, including the Special Fund therein, and all amounts in the Redevelopment Property Tax Trust Fund, and will attach, be perfected and be valid and binding against all parties having claims of any kind in tort, contract or otherwise against the Successor Agency, irrespective of whether such parties have notice of this Indenture; provided however, the parties hereto acknowledge that the County Auditor-Controller is authorized by Section 34183(a) of the Dissolution Act to use Pledged Tax Revenues to pay the County ’s administrative costs allowed under Section 34182 and Section 95.3 of the Revenue and Taxation Code a nd is required by Section 34183(a)(1) of the Dissolution Act to pay Pledged Tax Revenues to the County pursuant to the County Agreement and to taxing entities pursuant to Sections 33607.5 and 33607.7 of the Law (unless such payments are subordinated to payments on the 2022 Bond s and Parity Debt pursuant to Section 33607.5(e) of the Law or 34177.5(c) of the Dissolution Act) , and provided further that the Successor Agency is required to make payments from Pledged Tax Revenues under the Prior Agreements on a basis senior to the 2022 Bonds. Except for the Pledged Tax Revenues, such amounts and such funds and accounts, no other moneys, funds, accounts or properties of the Successor Agency are pledged to, or otherwise liable for, the payment of principal of or interest or redemption premium (if any) on the 2022 Bonds or Parity Debt except as provided in the following paragraph with respect to the 2022 Bonds and other Bonds.
The Debt Service Fund and any fund or account or sub -accounts created under this Indenture (other than the Costs of Issuance Fund and the Rebate Fund) , including amounts on deposit therein (including proceeds of the 2022 Bonds), are irrevocably pledged under this Indenture to secure the payment of the principal of and interest on the 2022 Bonds and other Bonds without preference or priority for series issue, number, dated date, sale date, date of execution or date of delivery. Such pledge shall constitute a first and exclusive lien on and security interest in the Debt Service Fund and any oth er fund or account created under this Indent ure, and including amounts on deposit therein (including proceeds of the 2022 Bonds), and will attach, be perfected and be valid and binding against all parties having claims of any kind in tort, contract or othe rwise against the Successor Agency, irrespective of whether such parties have notice of this Indenture, subject to Section 6.06.
The parties acknowledge that Section 34177.5(g) of the Dissolution Act provides that the 2022 Bonds and Parity Debt are further secured by a pledge of, and lien on moneys deposited in the Redevelopment Property Tax Trust Fund held by the County Auditor Controller related to the Successor Agency, which moneys, subject to (i) the payment by the County Auditor Controller of certain amounts to the County for administrative costs allowed under Section 34182 and Section 95.3 of the Revenue and Taxation Code , to the County pursuant to the County Agreement and to taxing entities pursuant to Sections 33607.5 and 33607.7 of the Law (unless such payments are subordinated to payments on the 2022 Bond s and Parity Debt pursuant to Section 33607.5(e) of the Law or Section 34177.5(c) of the Dissolution Act), and (ii) the payment by the Successor Agency of amounts due under the Prior Agreements, constitute Pledged Tax Revenues as defined herein.
In consideration of the acceptance of the 2022 Bonds and other Bonds by those who shall hold the same from time to time, this Indenture shall be deemed to be and shall constitute a contract between the Successor Agency and the Owners from time to time of the Bonds, and the covenants and agreements herein set forth to be performed on behalf of the Successor Agency shall be for the equal 171
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and proportionate benefit, security and protection of all Owners o f the 2022 Bonds and other Bonds without preference, priority or distinction as to security or otherwise of any of the 2022 Bonds and other Bonds over any of the others by reason of the number or date thereof or the time of sale, execution and delivery thereof, or otherwise for any cause whatsoever, except as expressly provided therein or herein.
Section 4.02 Redevelopment Obligation Retirement Fund; Special Fund; Deposit of Pledged Tax Revenues. There is hereby established a special fund to be known as the “Special Fund” which is to be held by the Successor Agency within the Redevelopment Obligation Retirement Fund. The Special Fund shall be held by the Successor Agency separate and apart from other funds of the Successor Agency.
The Successor Agency shall deposit all of the Pledged Tax Revenues received with respect to any ROPS Period into the Special Fund promptly upon receipt thereof by the Successor Agency in accordance with Section 5.13 hereof. Except as may be provided to the contrary in this Indenture or in any Supplemental Indenture or Parity Debt Instrument, upon receipt by the Successor Agency of money from the Redevelopment Property Tax Trust Fund requested in accordance with Section 5.13, subdivisions (b) or (c), as applicable, on each January 2 and June 1 or other date(s) on which Redevelopment Property Tax Trust Fund moneys are distributed to the Successor Agency, and deposit of such amounts into the Special Fund, all Pledged Tax Revenues received by the Successor Agency in excess of such amounts shall be released from the pledge and lien hereunder and shall be applied in accordance with the Law and the Dissolution Act, including but not limited to the payment of debt service on any subordinate debt. Prior to the payment in full of the principal of and i nterest and redemption premium (if any) on the Bonds and the payment in full of all other amounts payable hereunder and under any Supplemental Indentures or other Parity Debt Instrument, the Successor Agency shall not have any beneficial right or interest in the moneys on deposit in the Special Fund, except as may be provided in this Indenture and in any Supplemental Indenture or other Parity Debt Instrument.
Section 4.03 Deposit of Amounts by Trustee. There is hereby established a trust fund to be known as the Debt Service Fund, which shall be held by the Trustee hereunder in trust. If Parity Debt is issued under a Supplemental Indenture, the Trustee shall establish subaccounts within each account for each issue of Parity Debt, including a separate subaccount of the R eserve Account as security for Parity Debt pursuant to and as provided in a Supplemental Indenture to the extent provided under Section
3.04 hereof, if applicable. Moneys in the Special Fund shall be transferred by the Successor Agency to the Trustee in t he following amounts, at the following times, and deposited by the Trustee in the following respective special accounts, which are hereby established in the Debt Service Fund, and in the following order of priority (provided further that, if on the fifth (5th) Business Day prior to the date the Successor Agency is required to transfer amounts on deposit in the Special Fund to the Trustee there are not amounts on deposit therein sufficient to make the following deposits, taking into account amounts required to be transferred with respect to Bonds other than the 2022 Bonds, the Successor Agency shall immediately notify the Trustee of the amount of any such insufficiency and the Trustee shall deposit amounts received from the Successor Agency into sub -accounts of the Interest Account and/or Principal Account, as applicable, on a pro-rata basis):
(a) Interest Account. On or before the fifth (5th) Business Day preceding each Interest Payment Date, commencing with the Interest Payment Date of _____ 1, 2022 (with respect to the 2022 Bonds), the Successor Agency shall withdraw from the Special Fund and transfer to the Trustee, for deposit in the Interest Account an amount which when added to the amount contained in 172
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the Interest Account on that date, will be e qual to the aggregate amount of the interest becoming due and payable on the Outstanding Bonds on such Interest Payment Date. No such transfer and deposit need be made to the Interest Account if the amount contained therein is at least equal to the interest to become due on the next succeeding Interest Payment Date upon all of the Outstanding Bonds. All moneys in the Interest Account shall be used and withdrawn by the Trustee solely for the purpose of paying the interest on the Bonds as it shall become due and payable. The Trustee shall establish sub- accounts within the Interest Account for the payment of interest due on the 2022 Bonds and other Bonds, provided that all such Bonds shall be paid on a parity basis. (b) Principal Account . On or before the fifth (5th) Business Day preceding August 1 in each year beginning August 1, [2022] (with respect to the 2022 Bonds), the Successor Agency shall withdraw from the Special Fund and transfer to the Trustee for deposit in the Principal Account an amount which, when added to the amount then contained in the Principal Account, will be equal to the principal becoming due and payable on the Outstanding Bonds, including pursuant to mandatory sinking account redemption, on the next August 1. No such transfer and deposit need be made to the Principal Account if the amount contained therein is at least equal to the principal to become due on the next August 1 on all of the Outstanding Bonds. All moneys in the Principal Account shall be used and withdrawn by the Trustee solely for the purpose of paying the principal of the Bonds, including by mandatory sinking account redemption, as the same shall become due and payable. The Trustee may establish sub-accounts within the Principal Account for the payment of principal due on the 2022 Bonds and other Bonds, provided that all such Bonds shall be paid on a parity basis. (c) Reserve Account . There is hereby established in the Debt Service Fund a separate account known as the “Reserve Account” solely as security for payments of 2022 Bonds payable by the Successor Agency pursuant to this Section 4.03 which shall in each case be held by the Trustee in trust for the benefit of the Owners of the 2022 Bonds, provided separate subaccounts may be established in the Reserve Account as separat e security for any future issue of Parity Debt. [The Reserve Requirement for the 2022 Bonds (calculated on a standalone basis) will be satisfied by the delivery of the 2022 Reserve Policy by the 2022 Insurer on the Closing Date with respect to the 2022 Bonds. The Successor Agency will have no obligation to replace the 2022 Reserve Policy or to fund the Reserve Account with cash if, at any time that the 2022 Bonds are Outstanding, any rating assigned to the 2022 Insurer is downgraded, suspended or withdr awn or amounts are not available under the 2022 Reserve Policy, other than in connection with a draw on the 2022 Reserve Policy.] Except as provided in the preceding paragraph and as may be provided in a Supplemental Indenture or Parity Debt Instrument, in the event that the amount on deposit in the Reserve Account (or the applicable subaccount) at any time becomes less than the Reserve Requirement applicable thereto, the Trustee shall promptly notify the Successor Agency of such fact.
Upon receipt of any such notice and as promptly as is permitted by the Law, the Successor Agency shall transfer to the Trustee an amount sufficient to maintain the Reserve Requirement on deposit in the applicable Reserve Account.
The amounts available under the 2022 Reserve Policy shall be used and withdrawn by the Trustee solely for the purpose of making transfers to the Interest Account and the Principal Account in such order of priority, in the event of any deficiency at any time in any of such accounts with respect to the payment of debt service on the 2022 Bonds.
Moneys, if any, on deposit in the Reserve Account (or the applicable subaccount therein) shall be withdrawn and applied by the Trustee for the final payment or payments of principal 173
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of and interest on the 2022 Bonds (or the applicable account therein, respectively). The Trustee shall compute the Reserve Requirement annually on or before August 1.
In no event shall amounts in the Reserve Account (exclusive of subaccounts therein, which shall be applied in accordance with the terms of the Supplemental Indenture providing for Parity Debt) be applied to payment of any Bonds or Parity Debt other than 2022 Bonds.
Except as provided above, the amount on deposit in the Reserve Account shall be maintained at the Reserve Req uirement at all times prior to the payment of the applicable series of Bonds in full. If there shall then not be sufficient Pledged Tax Revenues to transfer an amount sufficient to maintain the Reserve Requirement on deposit in the Reserve Account, the Su ccessor Agency shall be obligated to continue making transfers as Pledged Tax Revenues become available until there is an amount sufficient to maintain the Reserve Requirement on deposit in the Reserve Account. No such transfer and deposit need be made to the Reserve Account so long as there shall be on deposit therein a sum at least equal to the Reserve Requirement. All money in the Reserve Account shall be used and withdrawn by the Trustee solely for the purpose of making transfers pursuant to any Parity Debt Instrument and hereunder to the Interest Account and the Principal Account, in the event of any deficiency at any time in any of such accounts or for the retirement of all the Bonds then Outstanding, except that so long as the Successor Agency is no t in default hereunder or under any Parity Debt Instrument, any amount in the Reserve Account or subaccount thereof in excess of the applicable Reserve Requirement shall be withdrawn from the Reserve Account semiannually on or before two (2) Business Days preceding each February 1 and August 1 by the Trustee and deposited in the Interest Account or be applied pro rata in accordance with any applicable provision of a Parity Debt Instrument. On the Business Day preceding the final Interest Payment Date for a series of Bonds (or multiple series of Bonds issued under this Indenture or a single Parity Debt Instrument), all amounts held in the applicable subaccount of the Reserve Account shall be withdrawn from the Reserve Account and shall be transferred to the applicable subaccounts of the Interest Account and the Principal Account, in such order, for such series of Bonds, to the extent required to make the deposits then required to be made pursuant to this Section 4.03, or shall be applied pro rata as required by any Parity Debt Instrument, as applicable.
The Successor Agency shall have the right at any time to direct the Trustee to release funds from the Reserve Account or subaccount thereof, in whole or in part, by tendering to the Trustee:
(i) a Qualified Reserve Account Credit Instrument, and (ii) an opinion of Bond Counsel stating that neither the release of such funds nor the acceptance of such Qualified Reserve Account Credit Instrument will cause interest on the Bonds or any Parity Debt the interest on which is excluded from gross income of the owners thereof for federal income tax purposes to become includable in gross income for purposes of federal income taxation. Upon tender of such items to the Trustee, and upon delivery by the Successor Agency to the Trustee of written calculation of the amount permitted to be released from the Reserve Account (upon which calculation the Trustee may conclusively rely), the Trustee shall transfer such funds from the Reserve A ccount or subaccount thereof to the Successor Agency to be applied in accordance with the Law. The Trustee shall comply with the terms of any such Qualified Reserve Account Credit Instrument delivered to and accepted by it, as may be applicable to it and as shall be required to receive payments thereunder in the event and to the extent required to make any payment when and as required under this paragraph (d). Upon the expiration of any Qualified Reserve Account Credit Instrument, the Successor Agency sha ll either (i) replace such Qualified Reserve Account Credit Instrument with a new Qualified Reserve Account Credit Instrument, or (ii) deposit or cause to be deposited with the Trustee an amount of funds equal to the applicable Reserve Requirement, to be derived from the first legally available Pledged Tax Revenues. 174
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If the applicable Reserve Requirement is being maintained partially in cash and partially with a Qualified Reserve Account Credit Instrument, the cash shall be first used to meet any deficiency which may exist from time to time in the Interest Account or the Principal Account for the purpose of making payments required pursuant to Sections 4.03(a) or 4.03(b) of this Indenture. If the Reserve Requirement is being maintained with two or more Qualified Reserve Account Credit Instruments, any draw to meet a deficiency which may exist from time to time in the Interest Account or the Principal Account for the purpose of making payments required pursuant to Sections 4.03(a) or 4.03(b) of this Indenture shall be pro-rata with respect to each such instrument.
The Reserve Account shall be maintained in the form of one or more separate sub - accounts which are established for the purpose of holding the proceeds of separate issues of any Parity Debt in conform ity with applicable provisions of the Code to the extent directed by the Successor Agency in writing to the Trustee. Separate series of Parity Debt may be secured by common sub - accounts of the Reserve Account as provided in one or more Supplemental Indent ures and/or Parity Debt Instruments from time to time.
Section 4.04 Rebate Fund . The Trustee shall establish a separate fund for the 2022A Bonds designated the “Rebate Fund.” Absent an opinion of Bond Counsel that the exclusion from gross income for federal income tax purposes of interest on the 2022A Bonds will not be adversely affected, the Successor Agency shall cause to be deposited in the Rebate Fund such amounts as are required to be deposited therein pursuant to this Section and the Tax Certificate. All money at any time deposited in the Rebate Fund shall be held by the Trustee in trust, for payment to the United States Treasury. All amounts on deposit in the Rebate Fund for the 2022A Bonds shall be governed by this Section and the Tax Certificate, unless the Successor Agency obtains and delivers to the Trustee an opinion of Bond Counsel that the exclusion from gross income of interest on the 2022A Bonds will not be adversely affected for federal income tax purposes if such requirements are not satisfied. Notw ithstanding anything to the contrary contained herein or in the Tax Certificate, the Trustee shall be deemed conclusively to have complied with the provisions of this Section and the Tax Certificate if the Trustee follows the directions of the Successor Ag ency, and the Trustee shall have no independent responsibility to or liability resulting from failure of the Trustee to enforce compliance by the Successor Agency with the Tax Certificate or the provisions of this Section. (a) Excess Investment Earnings.
(i) Computation. Within 55 days of the end of each fifth Bond Year with respect to the 2022A Bonds, the Successor Agency shall calculate or cause to be calculated the amount of rebatable arbitrage, in accordance with Section 148(f)(2) of the Code and Section 1.148-3 of the Treasury Regulations (taking into account any applicable exceptions with respect to the computation of the rebatable arbitrage, described, if applicable, in the Tax Certificate (e.g. the temporary investments exception of Section 148(f)(4)(B) and the construction expenditure exception of Section 148(f)(4)(C) of the Code), for this purpose treating the last day of the applicable Bond Year as a computation date, within the meaning of Section 1.148-1(b) of the Treasury Regulation s (the “Rebatable Arbitrage”). The Successor Agency shall obtain expert advice as to the amount of the Rebatable Arbitrage to comply with this Section.
(ii) Transfer. Within 55 days of the end of each fifth Bond Year with respect to the 2022A Bonds, upon the Finance Director ’s written direction, an amount shall be deposited to the Rebate Fund by the Successor Agency from any legally available funds, which may include transfer thereto from other funds and accounts established herein upon and pursuant to 175
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instruction of the Successor Agency to the Trustee (and provided that such transfer is permitted by the terms hereof applicable to such other fund or account) , so that the balance in the Rebate Fund shall equal the amount of Rebatable Arbitrage so calculated in accordance with cla use (i) of this Section 4.04(a). In the event that immediately following the deposit or transfer required by the previous sentence, the amount then on deposit to the credit of the Rebate Fund exceeds the amount required to be on deposit therein, upon written instructions from the Finance Director, the Trustee shall withdraw the excess from the Rebate Fund and then credit the excess to the Debt Service Fund. (iii) Payment to the Treasury . The Successor Agency shall direct the Trustee in writing to pay to the United States Treasury, out of amounts in the Rebate Fund. (X) Not later than 60 days after the end of (A) the fifth Bond Year with respect to the 2022A Bonds, and (B) each applicable fifth Bond Year thereafter, an amount equal to at least 90% of the Rebatable Arbitrage calculated as of the end of such Bond Year; and (Y) Not later than 60 days after the payment of all the 2022A Bonds, an amount equal to 100% of the Rebatable Arbitrage calculated as of the end of such applicable Bond Year, and any income attrib utable to the Rebatable Arbitrage, computed in accordance with Section 148(f) of the Code.
In the event that, prior to the time of any payment required to be made from the Rebate Fund, the amount in the Rebate Fund is not sufficient to make such payment wh en such payment is due, the Successor Agency shall calculate or cause to be calculated the amount of such deficiency and deposit an amount received from any legally available source, including the other funds and accounts established herein, equal to such deficiency in the Rebate Fund prior to the time such payment is due. Each payment required to be made pursuant to this Section 4.04(a)(iii) shall be made to the Internal Revenue Service Center, Ogden, Utah 84201 on or before the date on which such payment is due, and shall be accompanied by Internal Revenue Service Form 8038-T prepared by the Successor Agency, or shall be made in such other manner as provided under the Code. (b) Disposition of Unexpended Funds. Any funds remaining in the Rebate Fund after redemption and payment of the 2022A Bonds and the payments described in Section 4.04(a)(iii), shall be transferred by the Trustee to the Successor Agency at the written direction of the Successor Agency and utilized in any manner by the Successor Agency. (c) Survival of Defeasance. Notwithstanding anything in this Section 4.04 or this Indenture to the contrary, the obligation to comply with the requirements of this Section shall survive the defeasance of the 2022A Bonds and any Parity Debt.
(d) Trustee Responsible. The Trustee shall have no obligations or responsibilities under this Section other than to follow the written directions of the Successor Agency. The Trustee shall have no responsibility to make any calcu lations of rebate or to independently review or verify such calculations.
Section 4.05 [Provisions Relating to 2022 Insurance Policy].
Section 4.06 [Provisions Relating to 2022 Reserve Policy]. 176
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ARTICLE V
OTHER COVENANTS OF THE SUCCESSOR AGENCY
Section 5.01 Punctual Payment. The Successor Agency sh all punctually pay or cause to be paid the principal and interest to become due in respect of all the Bonds together with the premium thereon, if any, in strict conformity with the terms of the Bonds and of this Indenture. The Successor Agency shall faithfully observe and perform all of the conditions, covenants and requirements of this Indenture, all Supplemental Indentures and the Bonds. Nothing herein contained shall prevent the Successor Agency from making advances of its own moneys howsoever derived to any of the uses or purposes referred to herein.
Section 5.02 Limitation on Additional Indebtedness; Against Encumbrances . The Successor Agency hereby covenants that, so long as the Bonds are Outstanding, the Successor Agency shall not issue any bonds, notes or other obligations, enter into any agreement or otherwise incur any indebtedness, which is in any case payable from all or any part of the Pledged Tax Revenues (i) on a basis senior to the Bonds or (ii) on a parity with the Bonds except for Parity Debt issued to refund any of the Bonds , other Parity Debt or the Prior Agreements , and then only if the requirements of Section 3.04 are met. The Successor Agency will not otherwise encumber, pledge or place any charge or lien upon any of the Pledged Tax Revenues or other amounts pledged to the Bonds superior or equal to the pledge and lien herein created for the benefit of the Bonds.
Section 5.03 Extension of Payment. The Successor Agency will not, directly or indirectly, extend or consent to the extension of the time for the payment of any Bond or claim for interest on any of the Bonds and will not, directly or indirectly, be a party to or approve any such arrangement by purchasing or funding the Bonds or claims for interest in any other manner. In case the maturity of any such Bond or claim for interest shall be extended or funded, whether or not with the consent of the Successor Agency, such Bond or claim for interest so extended or funded shall not be entitled, in case of default hereunder, to the benefits of this Indenture, except subject to the prior payment in full of the principal of all of the Bonds then Outstanding and of all claims for interest which shall not have been so extended or funded.
Section 5.04 Payment of Claims . The Successor Agency shall promptly pay and discharge, or cause to be paid and discharged, any and all lawful claims for labor, materials or supplies which, if unpaid, might become a lien or charge upon the properties owned by the Successor Agency or upon the Pledged Tax Revenues or other amounts pledged to the payment of the Bonds, or any part thereof, or upon any funds in the hands of the Trustee, or which might impair the security of the Bonds. Nothing herein contained shall require the Successor Agency to make any such payment so long as the Successor Agency in good faith shall contest the validity of said claims.
Section 5.05 Books and Accounts; Financial Statements . The Successor Agency shall keep, or cause to be kept, proper books of record and accounts, separate from all other records and accounts of the Successor Agency and the City, in which complete and correct entries shall be made of all transactions relating to the Redevelopment Project, the Pledged Tax Revenues and the Special Fund.
Such books of record and accounts shall at all times during business hours be subject to the inspection of the 2022 Insurer, any other Insurer and the Owners of not less than ten percent (10%) in aggregate principal amount of the Bonds then Outstanding, or their representatives authorized in writing. 177
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The Successor Agency will cause to be prepared, on or before each April 1 so long as the Bonds are Outstanding, complete audited financial statements with respect to such Fiscal Year showing the Pledged Tax Revenues, all disbursements of Pledged Tax Revenues and the financial condition of the Redevelopment Project, including the balances in all funds and accounts relating to the Redevelopment Project, as of the end of such Fiscal Year. The Successor Agency shall promptly furnish a copy of such financial statements to the Trustee, the 2022 Insurer and any other Insurer at no expense and to any Owner upon reasonable request and at the expense of such Owner. The Trustee shall have no obligation to review, verify or analyze any financial statements provided to it by the Successor Agency and shall hold such financial statement solely as a repository for the benefit of the Owners of the Bonds.
The Trustee shall not be deemed to have notice of any information contained therein, or default or Event of Default which may be disclosed therein in any manner.
The Successor Agency agrees, consents and will cooperate in good faith to provide information reasonably requested by the 2022 Insurer and will further provide appropriately designated individuals and officers to discuss the affairs, finances and accounts of the Successor Agency or any other matter as the 2022 Insurer may reasonably request.
Section 5.06 Protection of Security and Rights of Owners. The Successor Agency will preserve and protect the security of the Bonds and the rights of the Owners. From an d after the Closing Date with respect to Bonds, the Bonds shall be incontestable by the Successor Agency.
Section 5.07 Payments of Taxes and Other Charges . Except as otherwise provided herein, the Successor Agency will pay and discharge, or cause to be paid and discharged, all taxes, service charges, assessments and other governmental charges which may hereafter be lawfully imposed upon the Successor Agency or the properties then owned by the Successor Agency in the Project Area, or upon the revenues therefrom when the same shall become due. Nothing herein contained shall require the Successor Agency to make any such payment so long as the Successor Agency in good faith shall contest the validity of said taxes, assessments or charges. The Successor Agency will duly ob serve and conform with all valid requirements of any governmental authority relative to the Project Area or any part thereof.
Section 5.08 Taxation of Leased Property . All amounts derived by the Successor Agency pursuant to Section 33673 of the Law with respect to the lease of property for redevelopment shall be treated as Pledged Tax Revenues for all purposes of this Indenture.
Section 5.09 Disposition of Property. The Successor Agency will not participate in the disposition of any land or real property in a Project Area to anyon e which will result in such property becoming exempt from taxation because of public ownership or use or otherwise (except property dedicated for public right-of-way and except property planned for public ownership or use by the Redevelopment Plan in effect on the date of issuance of the 2022 Bonds) so that such disposition shall, when taken together with other such dispositions, aggregate more than ten percent (10%) of the land area in the applicable Project Area unless such disposition is permitted as her einafter provided in this Section 5.09. If the Successor Agency proposes to participate in such a disposition, it shall thereupon appoint an Independent Redevelopment Consultant to report on the effect of said proposed disposition.
If the Report of the Independent Redevelopment Consultant concludes that the security of the Bonds, or the rights of the Successor Agency, the Bondowners and the Trustee hereunder will not be materially impaired by said proposed disposition, the Successor Agency may thereafter make such disposition.
If said Report concludes that such security will be materially impaired by said proposed disposition, the Successor Agency shall disapprove said proposed disposition. This Section 5.09 shall not apply to 178
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the disposition of properti es to the City pursuant to the Successor Agency’s Long Range Property Management Plan prepared pursuant to Health and Safety Code Section 34191.4.
Section 5.10 Maintenance of Pledged Tax Revenues . The Successor Agency shall comply with all requirements of the Law and the Dissolution Act to ensure the allocation and payment to it of the Pledged Tax Revenues as provided in the Dissolution Act.
Section 5.11 Tax Covenants . In connection with the 2022A Bonds, the Successor Agency covenants and agrees to contest by court action or otherwise any assertion by the United States of America or any departments or agency thereof that the interest received by the Bondowners is includable in gross income of the recipi ent under federal income tax laws on the date of issuance of the 2022A Bonds. Notwithstanding any other provision of this Indenture, absent an opinion of Bond Counsel that the exclusion from gross income of interest with respect to the 2022A Bonds and Parity Debt issued on a tax-exempt basis will not be adversely affected for federal income tax purposes, the Successor Agency covenants to comply with all applicable requirements of the Code necessary to preserve such exclusion from gross income and specifically covenants, without limiting the generality of the foregoing, as follows:
(a) Private Activity. The Successor Agency will take no action or refrain from taking any action or make any use of the proceeds of the 2022A Bonds or Parity Debt issued on a tax-exempt basis or of any other monies or property which would cause the 2022A Bonds or Parity Debt to be “private activity bonds” within the meaning of Section 141 of the Code; (b) Arbitrage. The Successor Agency will make no use of the proceeds of the 2022A Bonds or Parity Debt issued on a tax -exempt basis or of any other amounts or property, regardless of the source, or take any action or refrain from taking any action which will cause the 2022A Bonds or Parity Debt issued on a tax-exempt basis to be “arbitrage bonds” within the meaning of Section 148 of the Code;
(c) Federal Guaranty. The Successor Agency will make no use of the proceeds of the 2022A Bonds or Parity Debt issued on a tax -exempt basis or take or omit to take any action that would cause the 2022A Bonds or the Parity Debt issued on a tax -exempt basis to be “federally guaranteed” within the meaning of Section 149(b) of the Code; (d) Information Reporting. The Successor Agency will take or cause to be taken all necessary action to comply with the informationa l reporting requirement of Section 149(e) of the Code;
(e) Hedge Bonds. The Successor Agency will make no use of the proceeds of the 2022A Bonds or any Parity Debt issued on a tax -exempt basis or any other amounts or property, regardless of the source, or tak e any action or refrain from taking any action that would cause either any 2022 Bonds or the Parity Debt issued on a tax-exempt basis to be considered “hedge bonds” within the meaning of Section 149(g) of the Code unless the Successor Agency takes all necessary action to assure compliance with the requirements of Section 149(g) of the Code to maintain the exclusion from gross income of interest on the 2022A Bonds and any Parity Debt issued on a tax -exempt basis for federal income tax purposes; and
(f) Miscellaneous. The Successor Agency will take no action or refrain from taking any action inconsistent with its expectations stated in that certain Tax Certificate executed by 179
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the Successor Agency in connection with each issuance of 2022A Bonds and Parity Debt issued on a tax-exempt basis and will comply with the covenants and requirements stated therein and incorporated by reference herein.
Section 5.12 Continuing Disclosure. The Successor Agency hereby covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate.
Notwithstanding any other provision of this Indenture, failure of the Successor Agency to comply with the Continuing Disclosure Certificate shall not be considered an Event of Default; however, the Trustee at the request of any Participating Underwriter (as defined in the Continuing Disclosure Certificate) or the holders of at least 25% aggregate princip al amount of Outstanding 2022 Bonds, shall, but only to the extent the Trustee has been indemnified to its satisfaction from and against any loss, liability, cost or expense, including, without limitation, fees and expenses of its attorneys and advisors and additional fees and expenses of the Trustee, take such actions as may be necessary and appropriate to compel performance, including seeking mandate or specific performance by court order.
Section 5.13 Compliance with the Dissolution Act.
(a) The Successor Agency shall comply with all of the requirements of the Law and the Dissolution Act. Without limiting the generality of the foregoing, the Successor Agency covenants and agrees to file all required statements and hold all public hearings required under the Dissolution Act to assure compliance by the Successor Agency with its covenants hereunder.
Further, it will take all actions required under the Dissolution Act to include:
(i) scheduled debt service on the 2022 Bonds and any Parity Debt and any amount required under this Indenture to replenish the Reserve Account established hereunder or the reserve account established under any Parity Debt Instrument,
(ii) amounts due to any Insurer hereunder , under any Parity Debt Instrument or under an insurance or surety bond agreement, and (iii) amounts due under the Prior Agreements,
in Recognized Obligation Payment Schedules for each ROPS Period so as to enable the County Auditor-Controller to distribute from the Redevelopment Property Tax Trust Fund to the Successor Agency’s Redevelopment Obligation Retirement Fund on each January 2 and June 1 amounts required for the Successor Agency to pay principal of, and interest on, the Bonds coming due in the respective ROPS Period, to pay amounts owed to any Insurer, as well as the other amounts set forth above. (b) In order to accomplish the foregoing, on or before each February 1 (or at such earlier time as may be required by the Dissolution Act), for so long as any Bonds are outstanding, the Successor Agency shall submit an Oversight Board -approved Recognized Obligation Payment Schedule to the State Department of Finance and to the County Auditor-Controller that shall include, from the first Pledged Tax Revenues distributed to the Successor Agency on each January 2 and June 1 Redevelopment Property Tax Trust Fund distribution date (subject to prior payments described in Section 4.01): (i) all debt service due on all Outstanding 2022 Bonds and Parity Debt coming due during such Bond Year (with at least one-half of such Bond Year’s debt service to be distributed from the Redevelopment Property Tax Trust Fund on January 2 and the remainder of such Bond Year’s debt 180
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service to be distributed from the Redevelopment Property Tax Trust Fund on June 1), as well as all amounts due and owing to the 2022 Insurer hereunder or to any other Insurer , and (ii) any amount required to cure any deficiency in the Reserve Account pursuant to this Indenture or a reserve account established under any P arity Debt Instrument (including any amounts required due to a draw on the Qualified Reserve Account Credit Instrument as well as all amounts due and owing to the 2022 Insurer hereunder or to any other Insurer). The Successor Agency shall have the right, in its sole and absolute discretion, to request up to 100% of the principal and interest coming due during the applicable Bond Year from the RPTTF moneys to be distributed to the Successor Agency on the January 2 of such Bond Year, and to request the remainder of such Bond Year’s debt service to be distributed from the RPTTF on June 1 during such Bond Year.
(c) In the event the provisions set forth in the Dissolution Act as of the Closing Date of the 2022 Bonds that relate to the filing of Recognized Obligation Payment Schedules are amended or modified in any manner, the Successor Agency agrees to take all such actions as are necessary to comply with such amended or modified provisions so as to ensure the timely payment of debt service on the 2022 Bond s and other Parity Debt and, if the timing of distributions of the Redevelopment Property Tax Trust Fund is changed, the receipt of (i) not less than one half of the debt service due during each Bond Year on all Outstanding Bonds prior to February 1 of such calendar year, and (ii) the remainder of debt service due during such Bond Year on all Outstanding Bonds prior to the next succeeding August 1.
(d) [So long as the 2022 Bonds are Outstanding and the 2022 Insurer is not in default under the 2022 Insurance Policy or the 2022 Reserve Policy, in the event the Successor Agency fails to provide the Oversight Board or the Department of Finance with a Recognized Obligation Payment Schedule by the statutory deadlines, the Successor Agency designates the 2022 Insurer as its attorney-in-fact with the power to make such a request relating to the 2022 Bonds; provided however, that the 2022 Insurer will provide a copy of such request to the Successor Agency prior to such submission. With respect to Recognized Obligation Payment Schedules, if any amounts payable to the 2022 Insurer are not included on the then current Recognized Obligation Payment Schedule, the Successor Agency shall amend such Recognized Obligation Payment Schedule to the extent permitted by law.]
Section 5.14 Further Assurances. The Successor Agency will adopt, make, execute and deliver any and all such further resolutions, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facil itate the performance of this Indenture, and for the better assuring and confirming unto the Owners of the Bonds the rights and benefits provided in this Indenture.
Section 5.15 Last and Final Recognized Obligation Payment Schedule . [As long as the 2022 Bonds are Outstanding and the 2022 Insurer is not in default under the 2022 Reserve Policy or the 2022 Insurance Policy, the Successor Agency will not submit to the Oversight Board or the California Department of Finance a request for the final amendment permitted for its Last and Final Recognized Obligation Payment Schedule pursuant to Section 34191.6 of the California Health and Safety Code without the prior written consent of the 2022 Insurer, unless all amounts that could become due and payable to the 2022 Insurer under this Indenture would be included as a line item on the last and final Recognized Obligation Payment Schedule following approval of the requested final amendment.] Section 5.16 Meet and Confer; Recognized Obligation Payment Schedule. [So long as the 2022 Bonds are Outstanding, the Successor Agency shall provide the 2022 Insurer with copies of all 181
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Recognized Obligation Payment Schedules submitted and any and all correspondence received from the Department of Finance relating to or which could affect payments on th e Bonds upon receipt, except for requests for copies of agreements or other supporting documentation by the Department of Finance to support a Recognized Obligation Payment Schedule submitted by the Successor Agency .
Documents posted by the Department of Finance under their existing procedures on the Department of Finance website shall meet this requirement. In the event that the Successor Agency is a party to a meet and confer with the Department of Finance that relates to the payment of debt service on or security for the 2022 Bonds or Policy Costs, the Successor Agency shall notify the 2022 Insurer and, if the subject of the meet and confer could prevent timely payment of or impair the security for the 2022 Bonds or Policy Costs, the 2022 Insurer shall have the right to participate in the meet and confer process either by appearance with the Successor Agency at the meet and confer or through written submission as the Insurer determines in its discretion. In the event the Successor Agency receives a Recognized Obligation Payment Schedule denial, whether relating to the 2022 Bonds or not, and such denial could prevent timely and full payment of debt service on the 2022 Bonds, the Successor Agency agrees to cooperate in good faith with the 2022 Insurer and the 2022 Insurer shall receive prompt notice of any such event and shall be permitted to attend any meetings with the Successor Agency and the Department of Finance and to discuss such matters with the Department of Finance directly.]
ARTICLE VI
THE TRUSTEE
Section 6.01 Duties, Immunities and Liabilities of Trustee. (a) The Trustee shall, prior to the occurrence of an Event of Default, and after the curing or waiver of all Events of Default which may have occurred, perform such duties and only such duties as are specifically set forth in this Indenture and no implied cove nants, duties or obligations shall be read into this Indenture against the Trustee. The Trustee shall, during the existence of any Event of Default known to it (which has not been cured or waived), exercise such of the rights and powers vested in it by th is Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. (b) The Successor Agency may remove the Trustee at any time, but only with the consent of all Insurers, upon thirty days ’ prior written notice, unless an Event of Default shall have occurred and then be continuing, and shall remove the Trustee (i) if at any time requested to do so by an instrument or concurrent instruments in writing signed by the Owners of not less than a majority in aggregate principal amount of the Bonds then Outstanding (or their attorneys duly authorized in writing) or (ii) if at any time the Successor Agency has knowledge that the Trustee shall cease to be eligible in accordance with subsection (f) of this Section, or shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or its property shall be appointed, or any public officer shall take control or charge of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation. In each case such removal shall be accomplished by the giving of written notice of such removal by the Successor Agency to the Trustee, with a copy to any Insurer, whereupon the Successor Agency shall appoint a successor Trustee by an instrument in writing.
(c) The Trustee may at any time resign by giving written notice of such resignation to the Successor Agency and by giving the Owners and any Insurer notice of such resignation by first class mail, postage prepaid, at their respective addresses shown on the Registration Books. Upon 182
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receiving such notice of resignation, the Successor Agency shall promptly appoint a successor Trustee by an instrument in writing, w ith notice of such appointment to be furnished to any Insurer. Such removal shall be accomplished by the giving of at least thirty (30) days written notice of such removal by the Successor Agency to the Trustee whereupon the Successor Agency shall immediately appoint a successor Trustee by an instrument in writing.
(d) Any removal or resignation of the Trustee and appointment of a successor Trustee shall become effective only upon acceptance of appointment by the successor Trustee. If no successor Trustee shall have been appointed and have accepted appointment within forty-five (45) days of giving notice of removal or notice of resignation as aforesaid, the resigning Trustee or any Owner (on behalf of such Owner and all other Owners) may petition any court of competent jurisdiction at the expense of the Successor Agency for the appointment of a successor Trustee and after being paid its fees and expenses then due and owing to it, and such court may thereupon, after such notice (if any) as it may deem proper, appoint such successor Trustee. Any successor Trustee appointed under this Indenture shall signify its acceptance of such appointment by executing, acknowledging and delivering to the Successor Agency and to its predecessor Trustee a written acceptance th ereof, and thereupon such successor Trustee, without any further act, deed or conveyance, shall become vested with all the moneys, estates, properties, rights, powers, trusts, duties and obligations of such predecessor Trustee, with like effect as if origi nally named Trustee herein; but, nevertheless at the Written Request of the Successor Agency or the request of the successor Trustee, such predecessor Trustee shall execute and deliver any and all instruments of conveyance or further assurance and do such other things as may reasonably be required for more fully and certainly vesting in and confirming to such successor Trustee all the right, title and interest of such predecessor Trustee in and to any property held by it under this Indenture and shall pay over, transfer, assign and deliver to the successor Trustee any money or other property subject to the trusts and conditions herein set forth. Upon request of the successor Trustee, the Successor Agency shall execute and deliver any and all instruments as may be reasonably required for more fully and certainly vesting in and confirming to such successor Trustee all such moneys, estates, properties, rights, powers, trusts, duties and obligations. Upon acceptance of appointment by a successor Trustee as prov ided in this subsection, the Successor Agency shall cause the successor Trustee to mail a notice of the succession of such Trustee to the trusts hereunder to each rating agency which then has a current rating on the Bonds and to the Owners at their respective addresses shown on the Registration Books.
(e) If an Event of Default hereunder occurs with respect to any Bonds of which the Trustee has been given or is deemed to have notice, as provided in Section 6.03(d) hereof, then the Trustee shall promptly give written notice thereof, by first-class mail to the any Insurer and the Owner of each such Bond, unless such Event of Default shall have been cured or waived before the giving of such notice; provided, however, that unless such Event of Default consists of th e failure by the Successor Agency to make any payment when due, the Trustee shall, within thirty (30) days of the Trustee’s knowledge thereof, give such notice to any Insurer, and the Trustee, with the consent of any Insurer may elect not to give such notice if and so long as the Trustee in good faith determines that it is in the best interests of the Bondowners not to give such notice. Such notice of Event of Default shall include the statements required by the third paragraph of Section 8.01(d), as applicable. (f) The Successor Agency agrees that, so long as any Bonds are Outstanding, the Trustee shall be: (i) a financial institution having a trust office in the State, having (or in the case of a corporation, national banking association or trust company inc luded in a bank holding company system, the related bank holding company shall have) a combined capital and surplus of at least $50,000,000, and subject to supervision or examination by federal or state authority; (ii) a state - 183
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chartered commercial bank tha t is a member of the Federal Reserve System having at least $1,000,000,000 of assets; or (iii) an entity otherwise approved by all Insurers in writing. If such financial institution publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purpose of this subsection the combined capital and surplus of such financial institution shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. In case at any time the Trustee shall cease to be eligible in accordance with the provisions of this subsection (f), the Trustee shall resign immediately in the manner and with the effect specified in this Section.
Section 6.02 Merger or Consolidation. Any bank, national banking association or trust company into which the Trustee may be merged or converted or with which may be consolidated or any bank, national banking association or trust company resulting from any merger, conversion or consolidation to which it shall be a party or any bank, national banking association or trust company to which the Trustee may sell or transfer all or substantially all of its corporate trust business, provided such bank, national banking association or trust company shall be eligible under subsection (f) of Section 6.01, shall be the successor to such Trustee without the execution or filing of any paper or any further act, anything herein to the contrary notwithstanding.
Section 6.03 Liability of Trustee.
(a) The recitals of facts herein and in the Bonds contained shall be taken as statements of the Successor Agency, and the Trustee shall not assume responsibility for the correctness of the same, nor make any representations as to the validity or sufficiency of this Indenture or of the security for the Bonds or the tax status of interest thereon nor shall incur any responsibility in respect thereof, other than as expressly stated herein. The Trustee shall, however, be responsible for its representations contained in its certificate of authentication on the Bonds. The Trustee shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or willful misconduct as finally determined by a court of competent jurisdic tion. The Trustee shall not be liable for the acts of any agents of the Trustee selected by it with due care. The Trustee and its officers and employees may become the Owner of any Bonds with the same rights it would have if they were not Trustee and, to the extent permitted by law, may act as depository for and permit any of its officers or directors to act as a member of, or in any other capacity with respect to, any committee formed to protect the rights of the Owners, whether or not such committee shall represent the Owners of a majority in principal amount of the Bonds then Outstanding. (b) The Trustee shall not be liable with respect to any action taken or omitted to be taken by it in accordance with the direction of the Owners of not less than a majorit y in aggregate principal amount of the Bonds at the time Outstanding relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee under this Indenture.
(c) The Trustee shall not be liable for any action taken by it and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture, except for actions arising from the negligence or willful misconduct of the Trustee as finally determined by a court of competent jurisdiction; and the Trustee shall not liable for errors in judgment made in good faith unless determined to be negligent in ascertaining pertinent facts. Where the Trustee is given the permissive ri ght to do things enumerated in this Indenture, such right shall not be construed as a mandatory duty.
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(d) The Trustee shall not be deemed to have knowledge of any Event of Default hereunder unless and until a responsible officer shall have actual knowledge the reof, or shall have received written notice thereof from the Successor Agency at its Principal Corporate Trust Office. In the absence of such actual knowledge or notice, the Trustee may conclusively assume that no Event of Default has occurred and is continuing under this Indenture. Except as otherwise expressly provided herein, the Trustee shall not be bound to ascertain or inquire as to the performance or observance by any other party of any of the terms, conditions, covenants or agreements herein or of any of the documents executed in connection with the Bonds, or as to the existence of an Event of Default thereunder. The Trustee shall not be responsible for the validity or effectiveness of any collateral given to or held by it. Without limiting the generality of the foregoing, the Trustee may rely conclusively on the Successor Agency’s certificates to establish the Successor Agency’s compliance with its financial covenants hereunder, including, without limitation, its covenants regarding the deposit of Pledged Tax Revenues into the Special Fund and the investment and application of moneys on deposit in the Special Fund (other than its covenants to transfer such moneys to the Trustee when due hereunder). (e) The Trustee shall have no liability or obligation to the Bondowners with respect to the payment of debt service on the Bonds by the Successor Agency or with respect to the observance or performance by the Successor Agency of the other conditions, covenants and terms contained in this Indenture, or with respect to the investment of any moneys in any fund or account established, held or maintained by the Successor Agency pursuant to this Indenture or otherwise. (f) No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers. The Trustee shall be entitled to interest on all amounts advanced by it at the maximum rate permitted by law.
(g) The Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, attorneys or receivers and the Trustee shall not be responsible for any intentional misconduct or negligence on the part of any a gent, attorney or receiver appointed with due care by it hereunder.
(h) The Trustee shall have no responsibility, opinion, or liability with respect to any information, statements or recital in any offering memorandum or other disclosure material prepared or distributed with respect to the issuance of the Bonds. (i) Before taking any action under Article VIII or this Article at the request of the Owners or any Insurer, the Trustee may require that a satisfactory indemnity bond be furnished by the Owners or any Insurer for the reimbursement of all expenses to which it may be put (including without limitation associated attorneys’ fees and expenses) and to protect it against all liability, except liability which is finally adjudicated by a court of competent jurisdict ion to have resulted from its negligence or willful misconduct in connection with any action so taken. (j) The Trustee shall have the right to accept and act upon instructions, including funds transfer instructions ( “Instructions”) given pursuant to this Inden ture and delivered using Electronic Means ( “Electronic Means” shall mean the following communications methods: e -mail, facsimile transmission, secure electronic transmission containing applicable authorization codes, passwords and/or authentication keys issued by the Trustee, or another method or system specified by the Trustee as available for use in connection with its services hereunder); provided, however, that the Successor Agency shall provide to the Trustee an incumbency certificate listing officers with the 185
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authority to provide such Instructions (“Authorized Officers”) and containing specimen signatures of such Authorized Officers, which incumbency certificate shall be amended by the Successor Agency whenever a person is to be added or deleted from t he listing. If the Successor Agency elects to give the Trustee Instructions using Electronic Means and the Trustee in its discretion elects to act upon such Instructions, the Trustee ’s understanding of such Instructions shall be deemed controlling. The Successor Agency understands and agrees that the Trustee cannot determine the identity of the actual sender of such Instructions and that the Trustee shall conclusively presume that directions that purport to have been sent by an Authorized Officer listed on the incumbency certificate provided to the Trustee have been sent by such Authorized Officer. The Successor Agency shall be responsible for ensuring that only Authorized Officers transmit such Instructions to the Trustee and that the Successor Agency and all Authorized Officers are solely responsible to safeguard the use and confidentiality of applicable user and authorization codes, passwords and/or authentication keys upon receipt by the Successor Agency. The Trustee shall not be liable for any losses , costs or expenses arising directly or indirectly from the Trustee ’s reliance upon and compliance with such Instructions notwithstanding such directions conflict or are inconsistent with a subsequent written instruction. The Successor Agency agrees: (i) to assume all risks arising out of the use of Electronic Means to submit Instructions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized Instructions, and the risk of interception and misuse by third parties; (ii) that it is fully informed of the protections and risks associated with the various methods of transmitting Instructions to the Trustee and that there may be more secure methods of transmitting Instructions than the method(s) selected by the Successor Agency; (iii) that the security procedures (if any) to be followed in connection with its transmission of Instructions provide to it a commercially reasonable degree of protection in light of its particular needs and circumstances; and (iv) to notify the Truste e immediately upon learning of any compromise or unauthorized use of the security procedures.
(k) The Trustee shall not be liable to the parties hereto or deemed in breach or default hereunder if and to the extent its performance hereunder is prevented by reas on of force majeure. The term “force majeure” means an occurrence that is beyond the control of the Trustee and could not have been avoided by exercising due care. Force majeure shall include but not be limited to acts of God, terrorism, war, riots, stri kes, fire, floods, earthquakes, epidemics or other similar occurrences.
(l) The Trustee shall not be responsible for or accountable to anyone for the subsequent use or application of any moneys which shall be released or withdrawn in accordance with the provisions hereof.
(m) The Trustee shall not be liable for special, indirect, punitive, or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.
Section 6.04 Right to Rely on Documents and Opinions . The Trustee shall have no liability in acting upon any notice, resolution, request, consent, order, certificate, report, opinion, facsimile transmission, electronic mail, or other paper or document reasonably believed by it to be genuine and to have been signed or prescribed by the proper party or parties, and shall not be required to make any investigation into the facts or matters contained thereon. The Trustee may consult wi th counsel, including, without limitation, counsel of or to the Successor Agency, with regard to legal questions, and the opinion or advice of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by the Trustee hereunder in accordance therewith. 186
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The Trustee shall not be bound to recognize any person as the Owner of a Bond unless and until such Bond is submitted for inspection, if required, and his title thereto is established to the satisfaction of the Trustee.
Whenever in the administration of the trusts imposed upon it by this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a Written Certificate of the Successor Agency, which shall be full warrant to the Trustee for any action taken or suffered under the provisions of this Indenture in reliance upon such Written Certificate, but in its discretion the Trustee may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as it may deem reasonable. The Trustee may conclus ively rely on any certificate or report of any Independent Accountant or Independent Redevelopment Consultant appointed by the Successor Agency.
Section 6.05 Preservation and Inspection of Documents. All documents received by the Trustee under the provisions of this I ndenture shall be retained in its possession and shall be subject at all reasonable times upon reasonable notice to the inspection of and copying by the Successor Agency and any Insurer and any Owner, and their agents and representatives duly authorized in writing, during regular business hours and under reasonable conditions. Delivery of reports or other documents to the Trustee shall not be deemed to constitute or impose actual or constructive notice or knowledge on the part of the Trustee, and such repo rts and documents may simply be held to be made available for inspection by Owners of Bonds.
Section 6.06 Compensation and Indemnification. The Successor Agency shall pay to the Trustee from time to time reasonable compensation for all services rendered under this Indenture in accordance with the letter proposal from the Trustee approved by the Successor Agency and also all reasonable expenses, charges, legal and consulting fees and other disbursements and those of its attorneys (including outside counsel and the allocated costs and disbursement of in-house counsel to the extent such services are not redundant with those provided by outside counsel), agents and employees, incurred in and about the performance of its powers and duties under this Indenture. The Trustee shall have a lien on the Pledged Tax Revenues and all funds and accounts held by the Trustee hereunder to secure the payment to the Trustee of all fees, costs and expenses, including reasonable compensation to its experts, attorneys and counsel (including outside counsel and the allocated costs and disbursement of in-house counsel to the extent such services are not redundant with those provided by outside counsel), and all indemnities provided to the Trustee herein, and such lien shall be a senior claim to that of the Bondholders and any other party as further provided in Section 8.02. In addition, and without prejudice to any o ther provision, fees, costs and expenses paid or incurred by Trustee in providing services after an Event of Default, together with its compensation for such services, are intended to constitute expenses of administration under any applicable federal, state or other applicable bankruptcy, insolvency or other similar law.
The Successor Agency further covenants and agrees to indemnify, defend and save the Trustee and its officers, directors, agents and employees, harmless against any loss, expense, including legal fees and expenses, and liabilities which it may incur to the extent arising out of or in connection with the exercise and performance of its powers and duties hereunder, including the costs and expenses of defending against any claim of liability, but excluding any and all losses, expenses and liabilities which are due to the negligence or willful misconduct of the Trustee, its officers, directors, agents or employees as finally determined by a court of competent jurisdiction. The obligations of the Successor 187
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Agency and the rights of the Trustee under this Section 6.06 shall survive resignation or removal of the Trustee under this Indenture and payment of the Bonds and discharge of this Indenture.
Section 6.07 Deposit and Investment of Moneys in Funds. Moneys in the Debt Service Fund, the Interest Account, the Principal Account, the Reserve Account and the Costs of Issuance Fund shall be invested by the Trustee in Permitted Investments as directed by the Successor Agency in the Written Request of the Successor Agency filed with the Trustee at least two (2) Business Days in advance of the making of such investments , except that moneys in the Reserve Account shall not be invested in Permitted Investments having a maturity of more than five (5) years, unless any such Permitted Investment is described in clause (g) of the definition thereof. In the absence of any such Written Request of the Successor Agency, the Trustee shall hold any such moneys uninvested. The Trustee shall be entitled to rely conclusively upon the written instructions of the Successor Agency directing investments in Permitted Investments as to the fact that each such investment is permitted by the laws of the State and is a Permitted Investment in which the Successor Authority is authorized to invest, and shall not be required to make further investigation with respect thereto. With respect to any restrictions set forth in the above list which embody legal conclusions (e.g., the existence, validity and perfection of security interests in collateral) , the Trustee shall be entitled to rely conclusively on an opinion of counsel or upon a representation of the provider of such Permitted Investment obtained at the Successor Agency’s expense. Moneys in the Special Fund may be invested by the Successor Age ncy in any obligations in which the Successor Agency is legally authorized to invest its funds. Obligations purchased as an investment of moneys in any fund shall be deemed to be part of such fund or account.
All interest or gain derived from the investment of amounts in any of the funds or accounts held by the Trustee hereunder shall be deposited in the Interest Account (pro-rata among sub-accounts); provided, however, that all interest or gain from the investment of amounts in the Reserve Account shall be deposited by the Trustee in the Interest Account only to the extent not required to cause the balance in the Reserve Account to equal the Reserve Requirement. The Trustee may act as principal or agent in the acquisition or disposition of any investment and may impose its customary charges therefor. The Trustee shall incur no liability for losses arising from any investments made at the direction of the Successor Agency or otherwise made in accordance with this Section. For investment purposes only, the Trustee may commingle the funds and accounts established hereunder, but shall account for each separately.
The Successor Agency acknowledges that to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity grant the Successor Agency the right to receive brokerage confirmations of security transactions as they occur, the Successor Agency specifically waives receipt of such confirmations to the extent permitted by law. The Trustee will furnish the Successor Agency monthly cash transaction statements which shall include detail for all investment transactions made by the Trustee hereunder.
All moneys held by the Trustee shall be held in trust, but need not be segregated from other funds unless specifically required by this Indenture. Except as specifically provided in this Indenture, the Trustee shall not be liable to pay interest on any moneys received by it, but shall be liable only to account to the Successor Agency for earnings derived from funds that have been invested.
If applicable, the Successor Agency covenants that all investments of amounts deposited in any fund or account created by or pursuant to this Indenture, or otherwise containing gross proceeds of any tax-exempt Bonds (within the meaning of Section 148 of the Code), shall be acquired, disposed of, and valued (as of the date that valuation is required by this Indenture or the Code) at Fair Market Value.
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to follow its normal practice in determining the value of Permitted Investments, which may include utilizing generally recognized pricing services (including brokers and dealers in securities) that may be available to it including those available through its regular accounting system and rely conclusively and without liability thereon.
Investments in funds or accounts (or portions thereof) that are subject to a yield restriction under applicable provisions of the Code shall be valued by the Successor Agency at their present value (within the meaning of Section 148 of the Code). Investments on deposit in the Reserve Account shall be valued semiannually two (2) Business Days preceding each February 1 and August 1 at their Fair Market Value.
Section 6.08 Accounting Records and Financial Statements. The Trustee shall at all times keep, or cause to be kept, proper books of record and account, prepared in accordance with corporate trust industry standards, in which accurate entries shall be made of all transactions relating to the proceeds of the Bonds made by it and all funds and accounts held by the Trustee established pursuant to this Indenture. Such books of record and account shall be available for inspection by the Successor Agency upon reasonable prior notice, at reasona ble hours and under reasonable circumstances. The Trustee shall furnish to the Successor Agency, on at least a monthly basis, an accounting of all transactions in the form of its customary statements relating to the proceeds of the Bonds and all funds and accounts held by the Trustee pursuant to this Indenture.
Section 6.09 Other Transactions with Successor Agency. The Trustee, either as principal or agent, may engage in or be interested in any financial or other transaction with the Successor Agency.
ARTICLE VII
MODIFICATION OR AMENDMENT OF THIS INDENTURE
Section 7.01 Amendment With And Without Consent of Owners. This Indenture and the rights and obligations of the Successor Agency and of the Owners may be modified or amended at any time by a Supplemental Indenture which shall become bindi ng upon adoption without the consent of any Owners or any Insurer, to the extent permitted by law, but only for any one or more of the following purposes:
(a) to add to the covenants and agreements of the Successor Agency in this Indenture contained, other covenants and agreements thereafter to be observed, including any covenant or agreement that provides for additional security for the Bonds, or to limit or surrender any rights or powers herein reserved to or conferred upon the Successor Agency; or (b) to make such provisions for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provision contained in this Indenture, or in any other respect whatsoever as the Successor Agency may deem necessary or desirable, provided under any circumstances that such modifications or amendments shall not, in the reasonable determination of the Successor Agency, materially adversely affect the interests of the Owners; or (c) to provide for the issuance of Parity Debt in accordance with Section 3.04; or (d) if applicable, to amend any provision hereof relating to the requirements of or compliance with the Code, to any extent whatsoever but only if and to the extent such amendment will 189
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not adversely affect the exemption from federal income taxation of interest on any of the Bonds, in the opinion of Bond Counsel; or
(e) to comply with amendments or supplements to the Dissolution Act; or (f) to comply with the requirements of a provider of a Qualified Reserve Account Credit Instrument.
In addition, e xcept as set forth in the preceding paragraph, this Indenture and the rights and obligations of the Successor Agency and of the Owners may be modified or amended at any time by a Supplemental Indenture which shall become binding when the written consent of each Insurer (but only with respect to any Bonds insured by such Insurer) and the Owners of a majority in aggregate principal amount of the Bonds then Outstanding are filed with the Trustee. No such modification or amendment shall (a) extend the maturity of or reduce the interest rate on any Bond or otherwise alter or impair the obligation of the Successor Agency to pay the principal, interest, or redemption premiums (if any) at the time and place and at the rate and in the currency provided therein of any Bond without the express written consent of any Insurer or the Owner of such Bond, or (b) reduce the percentage of Bonds required for the written consent to any such amendment or modification. In no event shall any Supplemental Indenture modify any of the rights or obligations of the Trustee without its prior written consent. In no event shall any Supplemental Indenture adversely affect the security for the Bonds or modify any of the rights or obligations of any Insurer without its prior written consent. In determining whether any amendment, consent, waiver or other action to be taken, or any failure to take action, under this Indenture would adversely affect the security for the 2022 Bonds or the rights of the Owners of the 2022 Bonds, the effect of any such amendm ent, consent, waiver, action or inaction shall be considered as if there were no 2022 Insurance Policy.
Section 7.02 Effect of Supplemental Indenture . From and after the time any Supplemental Indenture becomes effective pursuant to this Article VII, this Indenture shall be deemed to be modified and amended in accordance therewith, the respective rights, duties and obligations of the parties hereto or thereto and all Owners, as the case may be, shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modification and amendment, and all the terms and conditions of any Supplemental Indenture shall be deemed to be part of the terms and conditions of this Indenture for any and all purposes.
Section 7.03 Endorsement or Replacement of Bonds After Amendment. After the effective date of any amendment or modification hereof pursuant to this Article VII, the Successor Agency may, with the prior written consent of any Insurer, determine that any or all of the Bonds shall bear a notation, by endorsement in form approved by the Successor Agency, as to such amendment or modification and in that case upon demand of the Successor Agency the Owners of such Bonds shall present such Bonds for that purpose at the Principal Corporate Trust Office of the Trustee, and thereupon a suitable notation as to such action shall be made on such Bonds. In lieu of such notation, the Successor Agency may determine that new Bonds shall be prepared at the expense of the Successor Agency and executed in exchange for any or all of t he Bonds, and in that case, upon demand of the Successor Agency, the Owners of the Bonds shall present such Bonds for exchange at the Principal Corporate Trust Office of the Trustee, without cost to such Owners.
Section 7.04 Amendment by Mutual Consent. The provisions of this Article VII shall not prevent any Owner from accepting any amendment as to the particular Bond held by such Owner, provided 190
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that due notation thereof is made on such Bond and, provided further that written consent to such amendment shall first be obtained from any Insurer.
Section 7.05 Opinion of Counsel. Prior to executing any Supplemental Indenture, the Trustee shall be furnished an opinion of counsel, upon which it may conclusively rely to the effect that all conditions precedent to the execution of such Su pplemental Indenture under this Indenture have been satisfied and such Supplemental Indenture is authorized and permitted under this Indenture and , if expressly required by the terms of such Supplemental Indenture , does not adversely affect the exclusion of interest on any tax-exempt Bonds from gross income for federal income tax purposes or adversely affect the exemption of interest on the Bonds from personal income taxation by the State.
Section 7.06 Copy of Supplemental Inden ture to S&P and Moody’s . The Successor Agency shall provide to S&P and Moody’s, for so long as S&P and Moody ’s, as the case may be, maintain a rating on any of the Bonds (without regard to any municipal bond or financial guaranty insurance), a copy of any Supplemental Indenture.
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES OF OWNERS
Section 8.01 Events of Default and Acceleration of Maturities . The following events shall constitute Events of Default hereunder:
(a) if default shall be made by the Successor Agency in the due and punctu al payment of the principal of or interest or redemption premium (if any) on any Bond when and as the same shall become due and payable, whether at maturity as therein expressed, by declaration or otherwise;
(b) if default shall be made by the Successor Agency in the observance of any of the covenants, agreements or conditions on its part in this Indenture or in the Bonds contained, other than a default described in the preceding clause (a), and such default shall have continued for a period of thirty (30) days following receipt by the Successor Agency of written notice from the Trustee or any Insurer or written notice from any Owner (with a copy of said notice delivered to the Trustee and any Insurer) of the occurrence of such default, provided that if in the r easonable opinion of the Successor Agency (as stated in a written certificate to such effect provided by the Successor Agency to the Trustee, on which it may conclusively rely) the failure stated in the notice can be corrected, but not within such thirty ( 30) day period, such failure will not constitute an event of default if corrective action is instituted by the Successor Agency (with the prior written consent of any Insurer) within such thirty (30) day period and the Successor Agency thereafter diligentl y and in good faith cures such failure in a reasonable period of time as approved by any Insurer; (c) If the Successor Agency files a petition seeking reorganization or arrangement under the federal bankruptcy laws or any other applicable law of the United States of America, or if a court of competent jurisdiction will approve a petition by the Successor Agency seeking reorganization under the federal bankruptcy laws or any other applicable law of the United States of America, or, if under the provisions of any other law for the relief or aid of debtors, any court of competent jurisdiction will approve a petition by the Successor Agency, seeking reorganization under the federal bankruptcy laws or any other applicable law of the United States of America, or, if under the provisions of any 191
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other law for the relief or aid of debtors, any court of competent jurisdiction will assume custody or control of the Successor Agency or of the whole or any substantial part of its property; or (d) The principal of any Parity Debt shall be declared immediately due and payable under the terms of a Parity Debt Instrument.
In determining whether an Event of Default has occurred under (a) above, no effect shall be given to payments made under any municipal bond insurance policy, financi al guaranty insurance policy or Qualified Reserve Account Credit Instrument.
If an Event of Default has occurred under this Section and is continuing, the Trustee may, with the consent of the 2022 Insurer (so long as any 2022 Bonds are Outstanding), and, if requested in writing by the Owners of a majority in aggregate principal amount of the Bonds then Outstanding, the Trustee shall, (y) declare the principal of the Bonds, together with the accrued interest thereon, to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable, anything in this Indenture or in the Bonds to the contrary notwithstanding, and (z) subject to the provisions of Section 6.03(i) and Section 8.06, exercise any other remedies availa ble to the Trustee and the Bondowners in law or at equity, including an action in mandamus.
Promptly upon receiving written notice or actual knowledge of the occurrence of an Event of Default (which has not been cured or waived) , the Trustee shall give no tice of such Event of Default to each Insurer and to the Successor Agency as provided in and subject to the terms of Section 6.01(e).
Such notice shall also state whether the principal of the Bonds shall have been declared to be or have immediately become due and payable. With respect to any Event of Default described in subsections (a) or (c) above the Trustee shall, and with respect to any Event of Default described in subsection (b) above the Trustee in its sole discretion may, also give such notice to the Owners by mail, which shall include the statement that interest on the Bonds shall cease to accrue from and after the date, if any, on which the Trustee shall have declared the Bonds to become due and payable pursuant to the preceding paragraph (but only to the extent that principal and any accrued, but unpaid, interest on the Bonds is actually paid on such date).
Any such declaration that the principal of the Bonds, together with the accrued interest thereon, is to be due and payable immediately is subject, however, to the condition that if, at any time after the principal of the Bonds shall have been so declared due and payable, and before any judgment or decree for the payment of the moneys due shall have been obtained or entered, the Successor Agenc y shall, with the written consent of a majority in aggregate principal amount of the Owners of the Bonds then Outstanding, deposit with the Trustee a sum sufficient to pay all principal on the Bonds matured prior to such declaration and all matured installments of interest (if any) upon all the Bonds, with interest on such overdue installments of principal and interest (to the extent permitted by law), and the reasonable fees and expenses of the Trustee, (including the fees and expenses or its outside couns el and the allocated costs and disbursements of its in-house counsel to the extent such services are not redundant with those provided by outside counsel) and any and all other defaults known to the Trustee (other than in the payment of principal of and interest on t he Bonds due and payable solely by reason of such declaration) shall have been made good or cured to the satisfaction of the Trustee or provision deemed by the Trustee to be adequate shall have been made therefor, then, and in every such case, the Trustee shall promptly give written notice of the foregoing to any Insurer and the Owners of all Bonds then Outstanding, and with the prior written approval of the Owners of at least a majority in aggregate principal amount of the Bonds then Outstanding, by written notice to the Successor Agency and to the Trustee, may, on behalf of the Owners of all of the Bonds then Outstanding, rescind and annul such 192
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declaration and its consequences. However, no such rescission and annulment shall extend to or shall affect any subsequent default or shall impair or exhaust any right or power consequent thereon.
Section 8.02 Application of Funds Upon Acceleration . All amounts received by the Trustee pursuant to any right given or action taken by the Trustee under the provisions of this Indent ure (including the Trustee’s share of any Pledged Tax Revenues) and all sums in the funds and accounts established and held by the Trustee hereunder upon the date of the declaration of acceleration as provided in Section 8.01, and all sums thereafter recei ved by the Trustee hereunder, shall be applied by the Trustee in the following order upon presentation of the Bonds, and the stamping thereon of the payment if only partially paid, or upon the surrender thereof if fully paid:
First, to the payment of the fees, costs and expenses of the Trustee in declaring such Event of Default and in exercising the rights and remedies set forth in this Article VIII, including reasonable compensation to its agents, attorneys (including outside counsel and the allocated cost s and disbursements of its in-house counsel to the extent such services are not redundant with those provided by outside counsel) and advisors and any outstanding fees and expenses of the Trustee; and Second, to the payment of the whole amount then owing and unpaid upon the 2022 Bonds and Parity Debt for principal and interest, as applicable, with interest on the overdue principal, and installments of interest at the net effective rate then borne by the Outstanding 2022 Bonds or Parity Debt (to the extent that such interest on overdue installments of principal and interest shall have been collected), and in case such moneys shall be insufficient to pay in full the whole amount so owing and unpaid upon the 2022 Bonds and Parity Debt, then to the payment of such principal and interest without preference or priority, ratably to the aggregate of such principal and interest; and Third, to the payment of amounts required to restore the Reserve Account to the Reserve Requirement and to repay any amounts owed to the 2022 Insurer in connection with a draw on the 2022 Reserve Policy.
Section 8.03 Power of Trustee to Control Proceedings . In the event that the Trustee, upon the happening of an Event of Default, shall have taken any action, by judicial proceedings or otherwise, pursuant to its duties hereunder, whether upon its own discretion or upon the request of the Owners of a majority in principal amount of the Bonds then Outstanding, it shall have full power, in the exercise of its discretion for the best interests of the Owners of the Bonds, with respect to the continuance, discontinuance, withdrawal, compromise, settlement or other disposal of such action; provided, however, that the Trustee shall not, unless there no longer continues an Event of Default, discontinue, withdraw, compromise or settle, or otherwise dispose of any litigation pending at law or in equity, if at the time there has been filed with it a written request signed by the Owners of a majority in principal amount of the Outstanding Bonds hereunder opposing such discontinuance, withdrawal, compromise, settlement or other disposal of such litigation.
Section 8.04 Limitation on Owner’s Right to Sue. No Owner of any Bond issued hereunder shall have the right to institute any suit, action or proceeding at law or in equity, for an y remedy under or upon this Indenture, unless (a) such Owner shall have previously given to the Successor Agency, the Trustee and any Insurer written notice of the occurrence of an Event of Default; (b) the Owners of a majority in aggregate principal amoun t of all the Bonds then Outstanding shall have made written request upon the Trustee to exercise the powers hereinbefore granted or to institute such action, suit or proceeding in its own name; (c) said Owners shall have tendered to the Trustee indemnity reasonably acceptable to the Trustee against the costs, expenses and liabilities to be incurred in compliance with 193
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such request; and (d) the Trustee shall have refused or omitted to comply with such request for a period of sixty (60) days after such written request shall have been received by, and said tender of indemnity shall have been made to, the Trustee.
Such notification, request, tender of indemnity and refusal or omission are hereby declared, in every case, to be conditions precedent to the exercise by any Owner of any remedy hereunder; it being understood and intended that no one or more Owners shall have any right in any manner whatever by his or their action to enforce any right under this Indenture, except in the manner herein provided, and that all proceedings at law or in equity to enforce any provision of this Indenture shall be instituted, had and maintained in the manner herein provided and for the equal benefit of all Owners of the Outstanding Bonds.
The right of any Owner of any Bond to rece ive payment of the principal of (and premium, if any) and interest on such Bond as herein provided, shall not be impaired or affected without the written consent of such Owner, notwithstanding the foregoing provisions of this Section or any other provision of this Indenture.
Section 8.05 Non-Waiver. Nothing in this Article VIII or in any other provision of this Indenture or in the Bonds, shall affect or impair the obligation of the Successor Agency, which is absolute and unconditional, to pay from the Pledged Tax Reven ues and other amounts pledged hereunder, the principal of and interest and redemption premium (if any) on the Bonds to the respective Owners on the respective Interest Payment Dates, as herein provided, or affect or impair the right of action, which is als o absolute and unconditional, of the Owners or the Trustee to institute suit to enforce such payment by virtue of the contract embodied in the Bonds.
A waiver of any default by any Owner or the Trustee shall not affect any subsequent default or impair any rights or remedies on the subsequent default. No delay or omission of any Owner to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or an acquiescence therein, and every power and remedy conferred upon the Owners and the Trustee by the Law or by this Article VIII may be enforced and exercised from time to time and as often as shall be deemed expedient by the Owners and the Trustee.
If a suit, action or proceeding to enforce any right or exercise any remedy shall be abandoned or determined adversely to the Owners or the Trustee, the Successor Agency, the Trustee and the Owners shall be restored to their former positions, rights and remedies as if such suit, act ion or proceeding had not been brought or taken.
Section 8.06 Actions by Trustee as Attorney -in-Fact. Any suit, action or proceeding which any Owner shall have the right to bring to enforce any right or remedy hereunder may be brought by the Trustee for the equal benefit and protection of all Owners similarly situated and the Trustee is hereby appointed (and the successive respective Owners by taking and holding the Bonds shall be conclusively deemed so to have appointed it) the true and lawful attorney -in-fact of the respective Owners for the purpose of bringing any such suit, action or proceeding and to do and perform any and all acts and things for and on behalf of the respective Owners as a class or classes, as may be necessary or advisable in the opinion of the Tru stee as such attorney -in-fact, provided, however, the Trustee shall have no duty or obligation to exercise any such right or remedy unless it has been indemnified to its satisfaction from any loss, liability or expense (including fees and expenses of its outside counsel and the allocated costs and disbursements of its in-house counsel to the extent such services are not redundant with those provided by outside counsel).
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Section 8.07 Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Owners is intended to be exclusive of any other remedy. Every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing, at law or in equity or by statute or otherwise, and may be exercised without exh austing and without regard to any other remedy conferred by the Law or any other law.
Section 8.08 Determination of Percentage of Bondowners . Whenever in this Indenture the consent, direction or other action is required or permitted to be given or taken by a percentag e of the Owners of an aggregate principal amount of Outstanding Bonds (including by the Owners of a majority in aggregate principal amount of the Outstanding Bonds), such percentage shall be calculated on the basis of the principal amount of the Outstanding Bonds determined as of the next succeeding Interest Payment Date.
ARTICLE IX
MISCELLANEOUS
Section 9.01 Special Obligations . The Bonds are special obligations of the Successor Agency secured by a pledge and lien as described in Section 4.01 hereof. The Bonds are not debts, liabilities or obligations of the City previously defined, the State of California, or any of its political subdivisions, and neither the City, said State, nor any of its political subdivisions is liable thereon, nor in any event shall the Bonds be payable out of any funds or properties other than those pledged by the Successor Agency. The Bonds do not constitute an indebtedness in contravention of any constitutional or statutory debt limitation or restriction.
Section 9.02 Benefits Limited to Parties . Nothing in th is Indenture, expressed or implied, is intended to give to any person other than the Successor Agency, each Insurer, the Trustee and the Owners, any right, remedy or claim under or by reason of this Indenture. Any covenants, stipulations, promises or agreements in this Indenture contained by and on behalf of the Successor Agency shall be for the sole and exclusive benefit of the Trustee, such Insurers and the Owners. To the extent that this Indenture confers upon or gives any Insurer any right, remedy or claim under or by reason of this Indenture, each Insurer is hereby explicitly recognized as being third-party beneficiaries hereunder and may enforce any such right remedy or claim conferred, given or granted hereunder.
Section 9.03 Successor is Deemed Included in All References to Predecessor. Whenever in this Indenture or any Supplemental Indenture either the Successor Agency or the Trustee is named or referred to, such reference shall be deemed to include the successors or assigns thereof, and all the covenants and agreements in this Indenture contained by or on behalf of the Successor Agency or the Trustee shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not.
Section 9.04 Discharge of Indenture.
(a) If the Successor Agency shall pay and discharge the entire indebtedness on all Bonds or any portion thereof in any one or more of the following ways:
(i) by well and truly paying or causing to be paid the principal of and interest and premium (if any) on all or the applicable portion of Outstanding Bonds, as and when the same become due and payable;
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(ii) by irrevocably depositing with the Trustee in trust or an escrow agent, at or before maturity, money which, together with the available amounts then on deposit in the funds and accounts es tablished pursuant to this Indenture, is fully sufficient to pay all or the applicable portion of Outstanding Bonds, including all principal, interest and redemption premiums, if any, or; (iii) by irrevocably depositing with the Trustee in trust or an escrow agent, Defeasance Obligations in such amount as an Independent Accountant shall determine (as evidenced by a verification report prepared and delivered by such Independent Accountant certifying such determination) will, together with the interest to accrue thereon and available moneys then on deposit in the funds and accounts established pursuant to this Indenture or on deposit with such escrow agent, be fully sufficient to pay and discharge the indebtedness on all Bonds or the applicable portion thereof (including all principal, interest and redemption premiums) at or before maturity; then, at the election of the Successor Agency, and notwithstanding that any Bonds shall not have been surrendered for payment, the pledge of the Pledged Tax Revenues and oth er amounts, funds and accounts described in Section 4.01 hereof and all other obligations of the Trustee and the Successor Agency under this Indenture shall cease and terminate with respect to all Outstanding Bonds or, if applicable, with respect to that portion of the Bonds which has been paid and discharged, except only (A) the covenants of the Successor Agency hereunder with respect to the Code, (B) the obligation of the Trustee to transfer and exchange Bonds hereunder, (C) the obligations of the Success or Agency under Section 6.06 hereof, and (D) the obligation of the Successor Agency to pay or cause to be paid to the Owners (or any Insurer), from the amounts so deposited with the Trustee, all sums due thereon and to pay the Trustee and any Insurer all fees, expenses and costs of the Trustee and any Insurer. In the event the Successor Agency shall, pursuant to the foregoing provision, pay and discharge any portion or all of the Bonds then Outstanding, the Trustee shall be authorized to take such actions and execute and deliver to the Successor Agency all such instruments as may be necessary or desirable to evidence such discharge, including, without limitation, selection by lot of Bonds of any maturity of the Bonds that the Successor Agency has determined to pay and discharge in part.
In the case of a defeasance or payment of all of the Bonds Outstanding, any funds thereafter held by the Trustee which are not required for said purpose or for payment of amounts due the Trustee pursuant to Section 6.06 shall be paid over to the Successor Agency. [To the extent that any of the Bonds to be defeased are 2022 Bonds, at least three Business Days prior to any defeasance, the Successor Agency shall deliver to the 2022 Insurer draft copies of an escrow agreement, an opinion of Bond Counsel regarding the validity and enforceability of the escrow agreement and the defeasance of such 2022 Bond s, and a verification report (a “Verification Report”) prepared by an Independent Accountant regarding the sufficiency of the escrow fund. Such opinion and Verification Report shall be addressed to such Insurer and the opinion, escrow agreement and Verification Report shall be in form and substance satisfactory to the 2022 Insurer.] (b) Notwithstanding anything herein to the contrary, in the event that the principal and/or interest due of the Bonds is paid by any Insurer, such Bonds shall remain Outstanding for all purposes, not be defeased or otherwise satisfied and not be considered paid by the Successor Agency, and the assignment and pledge of the Pledged Tax Revenues and other assets hereunder and all covenants, agreements and other obligations of the Successor Agency to the Bondowners so paid shall continue to exist and shall run to the benefit of such Insurer, and such Insurer shall be subrogated to the rights of such Bondowners, as applicable.
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Section 9.05 Execution of Documents and Proof of Ownership by Owners . Any request, consent, declaration or other instrument which this Indenture may require or permit to be executed by any Owner may be in one or more instruments of similar tenor, and shall be executed by such Owner in person or by such Owner’s attorneys appointed in writing.
Except as otherwise herein expressly provided, the fact and date of the execution by any Owner or his attorney of su ch request, declaration or other instrument, or of such writing appointing such attorney, may be proved by the certificate of any notary public or other officer authorized to take acknowledgments of deeds to be recorded in the state in which he purports to act, that the person signing such request, declaration or other instrument or writing acknowledged to him the execution thereof, or by an affidavit of a witness of such execution, duly sworn to before such notary public or other officer.
The ownership of Bonds and the amount, maturity, number and date of ownership thereof shall be proved by the Registration Books.
Any demand, request, direction, consent, declaration or other instrument or writing of the Owner of any Bond shall bind all future Owners of such Bond in respect of anything done or suffered to be done by the Successor Agency or the Trustee and in accordance therewith, provided, however, that the Trustee shall not be deemed to have knowledge that any Bond is owned by or for the account of the Succ essor Agency unless the Successor Agency is the registered Owner or the Trustee has received written notice that any other registered Owner is such an affiliate.
Section 9.06 Disqualified Bonds. In determining whether the Owners of the requisite aggregate principal amount of Bonds have concurred in any demand, request, direction, consent or waiver under this Indenture, Bonds which are owned or held by or for the account of the Successor Agency or the City (but excluding Bonds held in any employees’ retirement fund) shall be disregarded and deemed not to be Outstanding for the purpose of any such determination. Upon request of the Trustee, the Successor Agency and the City shall specify in a certificate to the Trustee those Bonds disqualified pursuant to this Section and the Trustee may conclusively rely on such certificate.
Section 9.07 Waiver of Personal Liability . No member, officer, agent or employee of the Successor Agency shall be individually or personally liable for the payment of the principal or interest or any premium on the Bonds; but nothing herein contained shall relieve any such member, officer, agent or employee from the performance of any official duty provided by law.
Section 9.08 Destruction of Cancelled Bonds. Whenever in this Indenture provision is made for the surrender to the Trustee of any Bonds which have been paid or cancelled pursuant to the provisions of this Indenture, the Trustee shall destroy such bonds and upon request of the Successor Agency provide the Successor Agency a certificate of destruction. The Successor Agency shall be entitled to rely upon any statement of fact contained in any certificate with respect to the destruction of any such Bonds therein referred to.
Section 9.09 Notices. Any notice, request, demand, communication or other paper shall be sufficiently given and shall be deemed given when delivered or upon receipt when mailed by first class, registered or certified mail, postage prepaid, or sent by facsimile, addressed as follows:
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If to the Successor Agency: Successor Agency to the
Hercules Redevelopment Agency
111 Civic Drive
Hercules, CA 94547
Attention: Executive Director
If to the Trustee: The Bank of New York Mellon Trust Company, N.A. 400 South Hope Street, Suite 500
Los Angeles, CA 90071
Attention: Corporate Trust Department
If to the Insurer: [
]
The Successor Agency and the Trustee may designate any further or different addresses to which subsequent notices, certificates or other communications shall be sent.
Section 9.10 Partial Invalidity . If any Section, paragraph, sentence, clause or phrase of this Indenture shall for any reason be held illegal, invalid or unenforceable, such holding shall not affect the validity of the remaining portions of this Indenture. The Successor Agency hereby declares that it would have adopted this Indenture and each and ev ery other Section, paragraph, sentence, clause or phrase hereof and authorized the issue of the Bonds pursuant thereto irrespective of the fact that any one or more Sections, paragraphs, sentences, clauses, or phrases of this Indenture may be held illegal, invalid or unenforceable. If, by reason of the judgment of any court, the Trustee is rendered unable to perform its duties hereunder, all such duties and all of the rights and powers of the Trustee hereunder shall, pending appointment of a successor Trus tee in accordance with the provisions of Section 6.01 hereof, be assumed by and vest in the Finance Officer of the Successor Agency in trust for the benefit of the Owners. The Successor Agency covenants for the direct benefit of the Owners that its Finance Officer in such case shall be vested with all of the rights and powers of the Trustee hereunder, and shall assume all of the responsibilities and perform all of the duties of the Trustee hereunder, in trust for the benefit of the Bonds, pending appointment of a successor Trustee in accordance with the provisions of Section 6.01 hereof.
Section 9.11 Unclaimed Moneys. Anything contained herein to the contrary notwithstanding, any money held by the Trustee in trust for the payment and discharge of the interest or premiu m (if any) on or principal of the Bonds which remains unclaimed for two (2) years after the date when the payments of such interest, premium and principal have become payable, if such money was held by the Trustee at such date, or for two (2) years after the date of deposit of such money if deposited with the Trustee after the date when the interest and premium (if any) on and principal of such Bonds have become payable, shall be repaid by the Trustee to the Successor Agency as its absolute property free from trust, and the Trustee shall thereupon be released and discharged with respect thereto and the Bondowners shall look only to the Successor Agency for the payment of the principal of and interest and redemption premium (if any) on of such Bonds.
Section 9.12 Execution in Counterparts; Electronic Delivery of Signatures. This Indenture may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. Signatures appearing on any counterpart of this Indenture may be 198
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delivered by facsimile transmission or by electronic delivery in PDF format, which transmission or delivery shall be deemed delivery of an originally executed document.
Section 9.13 Governing Law. This Indenture shall be construed and governed in accordance with the laws of the State.
Section 9.14 OFAC Compliance. The Successor Agency covenants and represents that neither it nor any of its affiliates, subsidiaries, directors or officers are the target or subject of any sanctions enforced by the US Government, (including, the Office of Foreign Assets Control of the U S Department of the Treasury (“OFAC”)), the United Nations Security Council, the European Union, HM Treasury, or other relevant sanctions authority (collectively “Sanctions”). The Successor Agency covenants and represents that neither it nor any of its af filiates, subsidiaries, directors or officers will use any payments made pursuant to this Indenture, (i) to fund or facilitate any activities of or business with any person who, at the time of such funding or facilitation, is the subject or target of Sanct ions, (ii) to fund or facilitate any activities of or business with any country or territory that is the target or subject of Sanctions, or (iii) in any other manner that will result in a violation of Sanctions by any person.
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IN WITNESS WHEREOF, the SUCCESSOR AGENCY TO THE HERCULES REDEVELOPMENT AGENCY has caused this Indenture to be signed in its name by its Executive Director, and THE BANK OF NEW YORK MELLON TRUST COMPAN Y, N.A., in t oken of its acceptance of the trusts created hereunder, has caused this Indenture to be signed in its corporate name by its officer thereunto duly authorized, all as of the day and year first above written.
SUCCESSOR AGENCY TO THE HERCULES
REDEVELOPMENT AGENCY
By:
Executive Director
ATTEST:
Secretary
THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A., as Trustee
By:
Authorized Officer
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EXHIBIT A
FORM OF BOND
UNITED STATES OF AMERICA
STATE OF CALIFORNIA
SUCCESSOR AGENCY TO THE
HERCULES REDEVELOPMENT AGENCY
TAX ALLOCATION REFUNDING BOND, SERIES [2022A] [2022B (FEDERALLY TAXABLE)]
INTEREST RATE: MATURITY DATE: DATED DATE: CUSIP:
_____% August 1, 20__ _____, 2022 ________
REGISTERED OWNER: CEDE & CO.
PRINCIPAL SUM: ___________________________________ DOLLARS The SUCCESSOR AGENCY TO THE HERCULES REDEVELOPMENT AGENCY , a public entity duly existing under and by virtue of the laws of the State of California (the “Successor Agency”), for value received hereby promises to pay to the Registered Owner stated above, or registered assigns (the “Registered Owner”), on the Maturity Date stated above (subject to any right of prior redemption hereinafter provided for, if any), the Principal Sum stated above and to pay interest thereon from the Interest Payment Date (as hereinafter defined) next preceding the da te of authentication of this Bond (as defined below), unless (i) this Bond is authenticated on or before an Interest Payment Date and after the close of business on the fifteenth (15th) calendar day of the month preceding such Interest Payment Date, whether or not such fifteenth (15th) calendar day is a Business Day (the “Record Date”) and on or before the following Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or (ii) this Bond is authenticated on or before _____ 15, 2022, in which event it shall bear interest from the Dated Date above; provided however, that if at the time of authentication of this Bond, interest is in default on this Bond, this Bond shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment on this Bond, until payment of such Principal Sum in full, at the Interest Rate per annum stated above, payable semiannually on February 1 and August 1 in each year, commencing _____ 1, 2022 (each an “Interest Payment Date”), calculated on the basis of a 360-day year comprised of twelve 30-day months. Principal hereof and premium, if any, upon redemption hereof, if any, are payable in lawful money of the United States of America upon presenta tion and surrender of this Bond at the corporate trust office (the “Principal Corporate Trust Office”) of The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”). Interest hereon (including the final interest payment upon maturity or redemption) is payable when due by check or draft of the Trustee mailed on the Interest Payment Date to the Registered Owner hereof at the Registered Owner ’s address as it appears on the Registration Books maintained by the Trustee at the close of business on the preceding Record Date; provided however, that at the written request of any Registered Owner of at least $1,000,000 aggregate principal amount of the Bonds, which written request is on file with the Trustee on any Record Date, 201
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interest hereon shall be paid by wire to such account in the United States as is specified in such written request.
This Bond is one of a duly authorized issue of bonds of the Successor Agency designated as “Successor Agency to the Hercules Redevelopment Agency Tax Allocation Refunding Bonds, Series [2022A] [2022B (Federally Taxable)] ” (the “2022[A][B] Bonds”), of an aggregate principal amount of $__________, all of like tenor and date (except for such variation, if any, as may be required to designate varying series, numbers, maturities, interest rates, or redemption, if any, and other provisions) and all issued pursuant to the provisions of the Refunding Law, the Dissolution Act, and the Law (as such terms are defined in the Indenture), and pursuant to an Indenture of Trust, dated as of _____ 1, 2022, entered into by and between the Successor Agency and the Trustee (the “Indenture”).
Concurrently with the issuance of the 2022[A][B] Bonds, the Successor Agency will issue the Successor Agency to the Hercules Redevelopment Agency T ax Allocation Refunding Bonds, Series [2022A] [2022B (Federally Taxable)] (the “2022[A][B] Bonds”) and together with the Series 2022[A][B] Bonds, the “Bonds” ) pursuant to the terms of the Indenture. The 2022[A][ B] Bonds constitute Bonds and are secured on a parity with other Bonds and Parity Debt under the Indenture.
The Bonds are being issued in the form of registered Bonds without coupons. Additional Parity Debt may be issued on a parity with the Bonds, but on ly subject to the terms of the Indenture.
Reference is hereby made to the Indenture (copies of which are on file at the office of the Successor Agency) and all indentures supplemental thereto and to the Refunding Law, the Dissolution Act, and the Law for a description of the terms on which the Bonds are issued, the provisions with regard to the nature and extent of the Pledged Tax Revenues (as that term is defined in the Indenture), and the rights thereunder of the Registered Owners of the Bonds and the rights, duties and immunities of the Trustee and the rights and obligations of the Successor Agency thereunder, to all of the provisions of which Indenture the Registered Owner of this Bond, by acceptance hereof, assents and agrees. Capitalized terms not otherwise defined herein shall have the meanings given them in the Indenture.
The Bonds have been issued by the Successor Agency for the purpose of providing funds to refinance certain bonds issued by the Former Agency with respect to the Project Area and to pay certain expenses of the Successor Agency in issuing the Bonds.
The Bonds are special obligations of the Successor Agency and this Bond and the interest hereon and all other Bonds and the interest thereon (to the extent set forth in the Indenture), are secured by a statutory pledge of, and lien on, Pledged Tax Revenues deposited in the Redevelopment Property Tax Trust Fund held by the Auditor -Controller of Contra Costa County, a pledge of, security interest in and lien on the Pledged Tax Revenues on deposit in the Redevelopment Obligation Retirement Fund, including the Special Fund therein, the Debt Service Fund, and any fund or account created under the Indenture, and are payable from Pledged Tax Revenues remaining after payment of certain amounts to the County Auditor-Controller for its administrative expenses , to the County pursuant to the County Agreement, to certain taxing entities as statutory pass -through payments, and certain payments required to be made under the Prior Agreement s on a basis senio r to the Bonds , as provided in the Dissolution Act and the Indenture.
There has been created, and will be maintained by, the Successor Agency the Special Fund into which Pledged Tax Revenues deposited by the Auditor-Controller of Contra Costa County in the Redevelopment Obligation Retirement Fund shall be transferred and from which the Successor Agency shall transfer amounts to the Trustee for payment, when due, of the principal of and the interest and redemption premium, if any, on the Bonds and any Parity Debt (as defined in the Indenture). 202
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[The 2022[A][B] Bonds are subject to optional and mandatory sinking fund redemption prior to maturity as provided in the Indenture.]
If an Event of Default, as defined in the Indenture, shall occur, the principal of all Bonds may be declared due and payable upon the conditions, in the manner and with the effect provided in the Indenture, but such declaration and its consequences may be rescinded and annulled as further provided in the Indenture.
The Bonds are issuable as fully registered Bonds without coupons in denominations of $5,000 and any integral multiple thereof. Subject to the limitations and conditions and upon payment of the charges, if any, as provided in the Indenture, Bonds may be exchanged for a like a ggregate principal amount of Bonds of other authorized denominations and of the same series, tenor and maturity.
This Bond is transferable upon the Registration Books, by the person in whose name it was registered, in person or by a duly authorized attorne y of such person upon surrender to the Trustee at the Principal Corporate Trust Office for cancellation, but only in the manner and subject to the limitations provided in the Indenture. Upon registration of such transfer a new fully registered Bond or Bonds, of any authorized denomination or denominations, for the same aggregate principal amount and of the same series, tenor and maturity will be issued to the transferee in exchange herefor. The Trustee may refuse to transfer or exchange (a) any Bond during the fifteen (15) days prior to the date established for the selection of Bonds for redemption, or (b) any Bond selected for redemption.
The Successor Agency and the Trustee may treat the Registered Owner hereof as the absolute owner hereof for all purposes, and the Successor Agency and the Trustee shall not be affected by any notice to the contrary.
The rights and obligations of the Successor Agency and the Registered Owners of the Bonds may be modified or amended at any time in the manner, to the extent and upon the terms provided in the Indenture, but no such modification or amendment shall (a) extend the maturity of or reduce the interest rate on any Bond or otherwise alter or impair the obligation of the Successor Agency to pay the principal, interest or redemption premiums (if any) at the time and place and at the rate and in the currency provided herein of any Bond without the express written consent of the respective Insurer and the Registered Owner of such Bond, or (b) reduce the percentage of Bonds required for the written consent to any such amendment or modification. In no event shall a Supplemental Indenture modify any of the rights or obligations of the Trustee without its prior written consent. In no event shall any Supplemental Indenture modify any of the rights or obligations of any Insurer without its prior written consent.
Unless this Bond is presented by an authorized representative of The Depository Trust Company, a New York corporation ( “DTC”), to the Successor Agency or the Trustee f or registration of transfer, exchange, or payment, and any Bond issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the Registered Owner hereof, Cede & Co., has an interest herein.
This Bond is not a debt, liability or obligation of the City of Hercules, the State of California, or any of its political subdivisions, and neither said City, said State, nor any of its political subdivisions 203
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is liable hereon, nor in any event shall this Bond be payable out of any funds or properties other than those pledged by the Successor Agency. The Bonds do not constitute an indebtedness in contravention of any constitutional or statutory debt limitation or restriction.
It is hereby certified that all of the things, conditions and acts required to exist, to have happened or to have been performed precedent to and in the issuance of this Bond do exist, have happened or have been performed in due and regular time and manner as required by the Law and the laws of the State of California, and that the amount of this Bond, together with all other indebtedness of the Successor Agency, does not exceed any limit prescribed by the Law or any laws of the State of California, and is not in excess of the amount of Bonds permitted to be issued under the Indenture.
This Bond shall not be entitled to any benefit under the Indenture or become valid or obligatory for any purpose until the Trustee ’s Certificate of Authentication hereon shall have been manually signed by the Trustee.
IN WITNESS WHEREOF, the Successor Agency to the Hercules Redevelopment Agency has caused this Bond to be executed in its name and on its behalf with the facsimile signature of its Executive Director and attested by the facsimile signature of its Secretary, all as of the Dated Date set forth above.
SUCCESSOR AGENCY TO THE
HERCULES REDEVELOPMENT AGENCY
By:
Executive Director
ATTEST:
Secretary
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[FORM OF TRUSTEE’S CERTIFICATE OF AUTHENTICATION]
This is one of the Bonds described in the within-mentioned Indenture.
Authentication Date: _________, 2022
THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A.,
as Trustee
By:
Authorized Signatory
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[FORM OF ASSIGNMENT]
For value received the undersigned hereby sells, assigns and transfers unto
(Name, Address and Tax Identification or Social Security Number of Assignee) the within -registered Bond and hereby irrevocably constitute(s) and appoints(s) attorney,
to transfer the same on the registration books of the Trustee with full power of substitution in the premises.
Dated: __________________________
Signatures Guaranteed:
Note: Signature(s) must be guaranteed by an
eligible guarantor.
Note: The signatures(s) on this Assignment
must correspond with the name(s) as
written on the face of the within Bond in
every particular without alteration or
enlargement or any change whatsoever.
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EXHIBIT B
REDEVELOPMENT PLAN
Dynamite Project Area
The redevelopment plan for the Dynamite Project Area was adopted by Ordinance No. 181 on November 30, 1983 and was amended on April 26, 1994 by Ordinance No. 325 and on February 27, 1996 by Ordinance No. 333.
Project Area No. 2
The redevelopment plan for Project Area No. 2 was adopted on April 13, 1999 by Ordinance No. 351.
Merged Project Area
On February 13, 2001, the City Council adopted Ordinance No. 33 merging and amending the redevelopment plans for the Dynamite Project Area and Project Area No. 2 to create the Merged Project Area. On March 8, 2005, the City Council adopted Ordinance No. 403 amending the Redevelopment Plan to increase the tax increment limit for the Dynamite Project Area portion of the Merged Project Area, eliminate the time limit on incurring indebtedn ess for the Project Area No. 2 portion of the Merged Project Area, and to combine the bond indebtedness for the Dynamite Project Area and Project Area No. 2 portions of the Merged Project Area. On June 9, 2009, the City Council adopted Ordinance No. 450 amending the Redevelopment Plan to add approximately 53 acres of territory to the Merged Project Area, extend the time limits on effectiveness, payment of indebtedness and receipt of property taxes for an additional 10 years, and reinstate eminent domain authority for a period of 12 years. 207
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ESCROW AGREEMENT (_____ BONDS)
This ESCROW AGREEMENT (the “Agreement”), dated as of _____ 1, 2022, is by and between the Successor Agency to the Hercules Redevelopment Agency (the “Agency”), as successor to the Hercules Redevelopment Agency (the “Prior Agency”), and The Bank of New York Mellon Trust Company, N.A., a national banking association having a corporate trust office in Los Angeles, California, and being qualified to accept and administer the escrow hereby created ( acting in such capacity, the “Escrow Bank”).
WITNESSETH:
WHEREAS, pursuant to an Indenture of Trust dated as of _______ (the “Prior Indenture”), by and between the Prior Agency and The Bank of New York Mellon Trust Company, N.A., as trustee (acting in such capacity, the “Prior Trustee” ), the Prior Agency issued its [REFUNDED BOND SERIES] (the “Refunded Bonds”); and
WHEREAS, pursuant to an Indenture of Trust dated as of _____ 1, 2022 (the “Indenture”), by and between the Agency and The Bank of New York Mellon Trust Company, N.A., as trustee (acting in such capacity, the “Refunding Bonds Trustee”) , the Agency issued its Tax Allocation Refunding Bonds, Series 2022A (the “Refunding Bonds”), for the purpose of providing moneys which, together with certain other amounts held under the Prior Indenture, will be sufficient to pay on _____, 2022 (the “Redemption Date”), the principal of the Refunded Bonds maturing after the Redemption Date at a redemption price equal to the principal amount thereof plus accrued interest thereon to the Redemption Date, without premium (the “Redemption Price”); and
WHEREAS, a portion of the proceeds of the Refunding Bonds shall be set aside in order to provide for the payment of the Refunded Bonds and such proceeds shall be deposited in a special escrow fund to be created hereunder and maintained by the Escrow Bank (the “Escrow Fund”); and WHEREAS, the Agency has taken action to cause to be delivered to the Escrow Bank, for deposit in the Escrow Fund, proceeds of the Refunding Bonds in an amount which, together with th e cash deposits described herein, is intended by the Agency to be sufficient to redeem the Refunded Bonds maturing on and after _________ on the Redemption Date at the Redemption Price; NOW, THEREFORE, the Agency and the Escrow Bank hereby agree as follows:
Section 1. Establishment, Funding and Maintenance of Escrow Fund. The Escrow Bank agrees to establish and maintain the Escrow Fund until final payment of the Refunded Bonds has been paid in full and to hold the moneys therein at all times as a special and separate escrow fund (wholly segregated from all other moneys on deposit with the Escrow Bank). The Agency hereby instructs the Prior Trustee to transfer $ __________ from the funds and accounts maintained with respect to the Refunded Bonds pursuant to the Prior I ndenture to the Escrow Bank for deposit in the Escrow Fund.
The Agency hereby instructs the Escrow Bank to deposit $__________ received from the Agency, representing amounts received from the Redevelopment Property Tax Trust Fund _____, 20__ distribution, into the Escrow Fund. The Agency hereby instructs the Escrow Bank to deposit $__________ received from the Refunding Bonds Trustee from a portion of the net proceeds of the sale of the Refunding Bonds into the Escrow Fund. The Escrow Bank shall hold all such amounts uninvested in cash.
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Section 2. Payment of the Refunded Bonds. The Agency hereby requests and irrevocably instructs the Escrow Bank, and the Escrow Bank hereby agrees, to collect and deposit in the Escrow Fund the amounts deposited pursuant to Section 1 hereof and to transfer all such amounts to the Prior Trustee for the payment of the Refunded Bonds at the places and in the manner stipulated in the Refunded Bonds and in the Prior Indenture. The Prior Trustee hereby confirms that it provided the Notice of Redemption in the form attached hereto as Schedule B on _____, 20__, pursuant to Section
2.04(b)(3) of the Prior Indenture, in accordance with instructions previously delivered by the Agency to the Prior Trustee. The Agency hereby irrevocably instructs the Prior Trustee to (ii) provide the Notice of Defeasance in substantially the form set forth in Schedule A hereto, and (ii) file such Notice of Defeasance with the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access System, maintained on the internet at http://emma.msrb.org/. In accordance with Sections 2.03 and
9.03 of the Prior Indenture, the Escrow Bank is irrevocably instructed to redeem the Refunded Bonds maturing on and after [August 1, 2025] on the Redemption Date at the Re demption Price. Upon payment in full of the Refunded Bonds, the Escrow Bank shall transfer any moneys remaining in the Escrow Fund to the Agency and this Agreement shall terminate.
Section 3. Possible Deficiencies; Amounts in Excess of Required Cash Balance. (a) If at a ny time the Escrow Bank has actual knowledge that the moneys in the Escrow Fund will not be sufficient to make all payments required by Section 2 hereof, the Escrow Bank shall notify the Agency in writing as soon as is reasonably practicable, of such fact, the amount of such deficiency and the reason therefor solely to the extent actually known to it; provided, however, the Agency shall have no liability under this Agreement for any deficiency and shall not be required by the terms of this Agreement to provide funds to eliminate any such deficiency. (b) The Escrow Bank shall in no manner be responsible for any deficiency in the Escrow Fund, and nothing herein shall impose or imply any obligation on the part of the Escrow Bank to verify, compute, or otherwise inq uire into the sufficiency of the Escrow Fund for the purposes hereof.
Section 4. Fees and Costs.
(a) The Agency shall pay to the Escrow Bank from time to time reasonable compensation for all services rendered under this Agreement and shall reimburse the Escrow Bank for all out of pocket expenses (including reasonable legal fees and expenses) incurred hereunder. (b) The fees of and the costs incurred by the Escrow Bank shall in no event be deducted or payable from, or constitute a lien against, the Escrow Fund.
Section 5. Merger or Consolidation. Any company into which the Escrow Bank may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which the Escrow Bank may sell or transfer all or substantially all of its corporate trust business, provided such company shall be eligible under this Agreement, shall be the successor to such Escrow Bank without the execution or filing of any paper or any further act, notwithstanding anything herein to the contrary.
Section 6. Indemnity. To the maximum extent permitted by law, the Agency hereby assumes liability for, and hereby agrees (whether or not any of the transactions contemplated hereby are consummated) to indemnify, protect, save a nd keep harmless the Escrow Bank and its respective 209
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successors, assigns, directors, officers, agents, employees and servants, from and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs, expenses and disbursements (including reasonable legal fees and disbursements) of whatsoever kind and nature which may be imposed on, incurred by, or asserted against, the Escrow Bank at any time (whether or not also indemnified against the same by the Agency or any other person under any other agreement or instrument, but without double indemnity) in any way relating to or arising out of the execution, delivery and performance of this Agreement, the establishment hereunder of the Escrow Fund, the acceptance of the funds d eposited therein, and any payment, transfer or other application of moneys by the Escrow Bank in accordance with the provisions of this Agreement; provided, however, that the Agency shall not be required to indemnify the Escrow Bank against the Escrow Bank’s own negligence or willful misconduct or to indemnify the Escrow Bank’s respective successors, assigns, agents and employees for their negligence or willful misconduct or to indemnify for the breach by the Escrow Bank of the terms of this Agreement. In no event shall the Agency or the Escrow Bank be liable to any person by reason of the transactions contemplated hereby other than to each other as set forth in this Agreement. The indemnities contained in this section shall survive the termination of this Agreement and the resignation or removal of the Escrow Bank.
Section 7. Responsibilities of the Escrow Bank . The Escrow Bank and its respective successors, assigns, agents and servants shall not be held to any personal liability whatsoever, in tort, contract, or ot herwise, in connection with the execution and delivery of this Agreement, the establishment of the Escrow Fund, the acceptance of the moneys deposited therein, or any payment, transfer or other application of moneys or obligations by the Escrow Bank in acc ordance with the provisions of this Agreement or by reason of any non -negligent act, non-negligent omission or non - negligent error of the Escrow Bank made in good faith in the conduct of its duties. The recitals of fact contained in the “Whereas” clauses herein shall be taken as the statements of the Agency and the Escrow Bank assumes no responsibility for the correctness thereof. The Escrow Bank makes no representation as to the sufficiency of the amounts deposited into the Escrow Fund to accomplish the defeasance of the Refunded Bonds or to the validity of this Agreement as to the Agency and, except as otherwise provided herein, the Escrow Bank shall incur no liability with respect thereto. The Escrow Bank shall not be liable in connection with the performance of its duties under this Agreement except for its own negligence, willful misconduct or default, and the duties and obligations of the Escrow Bank shall be determined solely by the express provisions of this Agreement and no implied covenants or obligations shall be read against the Escrow Bank hereunder. The Escrow Bank may consult with counsel, who may or may not be counsel to the Agency, and in reliance upon the written opinion or advice of such counsel shall have full and complete authorization and protection with respect to any action taken, suffered or omitted by it in good faith in accordance therewith. No provisions of this Agreement shall require the Escrow Bank to expend or risk its own funds or otherwise incur any financial liability by the performance or exercise of its rights or powers. Whenever the Escrow Bank shall deem it necessary or desirable that a matter be proved or established prior to taking, suffering, or omitting any action under this Agreement, such matter may be deemed to be conclusively established by a certificate signed by an authorized officer of the Agency.
The Escrow Bank may conclusively rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opi nion, report, notice, request, consent, order, approval or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. The Escrow Bank may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, attorneys, custodians or nominees appointed with due care, and shall not be responsible for any willful misconduct or negligence on the part of any agent, attorney, custodian or nominee so appointed. 210
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Anything in this Agreement to the contrary notwithstanding, in no event shall the Escrow Bank be liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if th e Escrow Bank has been advised of the likelihood of such loss or damage and regardless of the form of action. The Escrow Bank shall not be liable to the parties hereto or deemed in breach or default hereunder if and to the extent its performance hereunder is prevented by reason of force majeure. The term “force majeure” means an occurrence that is beyond the control of the Escrow Bank and could not have been avoided by exercising due care.
Force majeure shall include acts of God, terrorism, war, riots, s trikes, fire, floods, earthquakes, epidemics or other similar occurrences.
The Escrow Bank shall have the right to accept and act upon instructions, including funds transfer instructions (“Instructions”) given pursuant to this Agreement and delivered using Electronic Means (“Electronic Means” shall mean the following communications methods: e -mail, facsimile transmission, secure electronic transmission containing applicable authorization codes, passwords and/or authentication keys issued by the Escrow Bank, or another method or system specified by the Escrow Bank as available for use in connection with its services hereunder); provided, however, that the Agency shall provide to the Escrow Bank an incumbency certificate listing officers with the authority to provide such Instructions (“Authorized Officers”) and containing specimen signatures of such Authorized Officers, which incumbency certificate shall be amended by the Agency whenever a person is to be added or deleted from the listing. If the Agency elect s to give the Escrow Bank Instructions using Electronic Means and the Escrow Bank in its discretion elects to act upon such Instructions, the Escrow Bank’s understanding of such Instructions shall be deemed controlling. The Agency understands and agrees that the Escrow Bank cannot determine the identity of the actual sender of such Instructions and that the Escrow Bank shall conclusively presume that directions that purport to have been sent by an Authorized Officer listed on the incumbency certificate provided to the Escrow Bank have been sent by such Authorized Officer. The Agency shall be responsible for ensuring that only Authorized Officers transmit such Instructions to the Escrow Bank and that the Agency and all Authorized Officers are solely responsible to safeguard the use and confidentiality of applicable user and authorization codes, passwords and/or authentication keys upon receipt by the Agency. The Escrow Bank shall not be liable for any losses, costs or expenses arising directly or indirectly from the Escrow Bank’s reliance upon and compliance with such Instructions notwithstanding such directions conflict or are inconsistent with a subsequent written instruction. The Agency agrees: (i) to assume all risks arising out of the use of Electronic Means to submit Instructions to the Escrow Bank, including without limitation the risk of the Escrow Bank acting on unauthorized Instructions, and the risk of interception and misuse by third parties; (ii ) that it is fully informed of the protections and r isks associated with the various methods of transmitting Instructions to the Escrow Bank and that there may be more secure methods of transmitting Instructions than the method(s) selected by the Agency; (iii) that the security procedures (if any) to be fol lowed in connection with its transmission of Instructions provide to it a commercially reasonable degree of protection in light of its particular needs and circumstances; and (iv) to notify the Escrow Bank immediately upon learning of any compromise or unauthorized use of the security procedures.
The Agency acknowledges that to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity grant the Agency the right to receive brokerage confirmations of security transactions as they occur, the Agency specifically waives receipt of such confirmations to the extent permitted by law. The Escrow Bank will furnish the Agency periodic cash transaction statements which include detail for all investment transactions made by the Escrow Bank hereunder. 211
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The Escrow Bank shall have no liability or responsibility for any loss resulting from any investment made in accordance with the provisions of this Agreement.
The Escrow Bank shall not be liable for the accuracy of any calculations provided as to the sufficiency of the moneys deposited with it to pay the principal, interest, or premiums, if any, on the Refunded Bonds.
Section 8. Amendments. This Agreement is made for the benefit of the Agency and the owners from time to time of the Refunded Bo nds and it shall not be repealed, revoked, altered or amended without the written consent of all such owners, the Escrow Bank and the Agency; provided, however, that if the Agency and the Escrow Bank receive an opinion of nationally recognized bond attorneys to the effect that the exclusion from gross income for federal income tax purposes of the interest on the Refunded Bonds and the Bonds will not be adversely affected thereby, they may, without the consent of, or notice to, such owners, amend this Agreem ent or enter into such agreements supplemental to this Agreement as shall not materially adversely affect the rights of such owners and as shall not be inconsistent with the terms and provisions of this Agreement, for any one or more of the following purpo ses: (i) to cure any ambiguity or formal defect or omission in this Agreement; (ii) to grant to, or confer upon, the Escrow Bank for the benefit of the owners of the Refunded Bonds any additional rights, remedies, powers or authority that may lawfully be granted to, or conferred upon, such owners or the Escrow Bank; (iii) to include under this Agreement additional funds, securities or properties (but only if the sufficiency of the Escrow Fund for the purpose herein set forth is verified by a nationally rec ognized firm of independent certified public accountants) and shall hold funds received by it uninvested. The Escrow Bank shall be entitled to rely conclusively upon an unqualified opinion of nationally recognized municipal bond attorneys with respect to compliance with this Section 8, including the extent, if any, to which any change, modification, addition or elimination affects the rights of the owners of the Refunded Bonds or that any instrument executed hereunder complies with the conditions and provisions of this Section 8.
Section 9. Application of Certain Terms of the Prior Indenture . All of the terms of the Prior Indenture relating to the making of payments of principal and interest with respect to the Refunded Bonds and relating to the exchange or transfer of the Refunded Bonds are incorporated in this Agreement as if set forth in full herein. The procedures set forth in Article VI of the Prior Indenture relating to the removal, resignation and merger of the Prior Trustee under the Prior Indenture are also incorporated in this Agreement as if set forth in full herein and shall be the procedures to be followed with respect to any removal, resignation or merger of the Escrow Bank hereunder.
Section 10. Severability. If any section, paragraph, sentence, clause or provisio n of this Agreement shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such section, paragraph, sentence, clause or provision shall not affect any of the remaining provisions of this Agreement.
Section 11. Execution of Counterparts; Electronic Delivery of Signatures. This Agreement may be executed in any number of counterparts, each of which shall for all purposes be deemed to be an original and all of which shall together constitute but one and the same instrument. Signatures appearing on any counterpart of this Agreement may be delivered by facsimile transmission or by electronic delivery in PDF format, which transmission or delivery shall be deemed delivery of an originally executed document.
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Section 12. Applicable Law . This Agr eement shall be governed by and construed in accordance with the laws of the State of California.
Section 13. Definitions. Any capitalized term used but not otherwise defined in this Agreement shall have the meaning assigned to such term in the Prior Indenture.
Section 14. Assignment. This Agreement shall not be assigned by the Escrow Bank or any successor thereto without the prior written consent of the Agency provided, however, that an assignment made pursuant to Section 5 hereof shall not require prior written consent.
Section 15. Holidays. If the date for making any payment or the last date for performance of any act or the exercising of any right, as provided in this Agreement, shall be a legal holiday or a day on which banking institutions in which the principal office of the Escrow B ank is located are authorized by law to remain closed, such payment may be made or act performed or right exercised on the next succeeding day not a legal holiday or a day on which such banking institutions are authorized by law to remain closed, with the same force and effect as if done on the nominal date provided in this Agreement; and no interest shall accrue for the period from and after such nominal date.
Section 16. The Agency covenants and represents that neither it nor any of its affiliates, subsidiaries, dire ctors or officers are the target or subject of any sanctions enforced by the US Government, (including, the Office of Foreign Assets Control of the US Department of the Treasury (“OFAC”)), the United Nations Security Council, the European Union, HM Treasury, or other relevant sanctions authority (collectively “Sanctions”). The Agency covenants and represents that neither it nor any of its affiliates, subsidiaries, directors or officers will use any payments made pursuant to this Agreement, (i) to fund or f acilitate any activities of or business with any person who, at the time of such funding or facilitation,, is the subject or target of Sanctions, (ii) to fund or facilitate any activities of or business with any country or territory that is the target or subject of Sanctions, or (iii) in any other manner that will result in a violation of Sanctions by any person. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the Successor Agency to the Hercules Redevelopment Agency and The Bank of New York Mellon Trust Company, N.A. have caused this Agreement to be executed each on its behalf as of the day and year first above written.
THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A., as Escrow Bank
By:
Authorized Officer
SUCCESSOR AGENCY TO THE HERCULES
REDEVELOPMENT AGENCY
By:
Executive Director
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SCHEDULE A
HERCULES REDEVELOPMENT AGENCY
HERCULES MERGED PROJECT AREA
TAX ALLOCATION BONDS
[REFUNDED BOND SERIES]
Maturity Date
Principal
Amount Interest Rate CUSIP
Notice is hereby given to the owners of the above-captioned and listed bonds (collectively, the “Refunded Bonds”) that:
The Successor Agency to the Hercules Redevelopment Agency (the “Agency”) has deposited in an Escrow Fund with The Bank of New York Mellon Trust Company, N.A., as Escrow Bank, certain monies as permitted by that Indenture of Trust dated as of ________ (the “Indenture”), by and between The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”) and the Hercules Redevelopment Agency, pursuant to which the Refunded Bonds were issued, for the purpose of defeasing the Refunded Bonds. The moneys d eposited with the Escrow Bank will be sufficient to redeem the Refunded Bonds on _____, 2022 at a redemption price equal to the principal amount thereof and accrued interest thereon, without premium (the “Redemption Price”).
The Refunded Bonds are deemed to be paid in accordance with Section 10.01 of the Indenture and all liability of the Agency under the Indenture has ceased and been discharged except as provided in the Indenture. All obligations of the Agency under the Continuing Disclosure Agreement Dated as of ________ with respect to the Refunded Bonds have ceased and terminated.
The Agency and the Trustee shall not be responsible for the selection or use of the CUSIP numbers selected, nor is any representation made as to their correctness indicated in the notice or as printed on any Refunded Bond. They are included for the convenience of the holders.
Dated: _____, 2022 THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A.,
as Escrow Bank
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SCHEDULE B
CONDITIONAL NOTICE OF REDEMPTION
HERCULES REDEVELOPMENT AGENCY
HERCULES MERGED PROJECT AREA
TAX ALLOCATION BONDS
[REFUNDED BOND SERIES]
BASE CUSIP NO. 427101
NOTICE IS HEREBY GIVEN to the owners of the above -captioned [REFUNDED BOND SERIES] that are listed below (the “Bonds”) pursuant to the Indenture of Trust (the “Indenture”), dated as of _________, by and between the Hercules Redevelopment Agency and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”) , that the Bonds in the aggregate principal amount of $_________ have been called for redemption on _____, 2022 (the “Redemption Date”).
Maturity Date
Principal
Amount Interest Rate Price
CUSIP
Suffix
The Bonds will be payable on the Redemption Date at a redemption price of 100% of the principal amount plus accrued interest to such date , without premium (the “Redemption Price”) . Interest with respect to the Bonds to be redeemed will cease to accrue on and after the Redemption Date, and such Bonds will be surrendered to the Trustee.
All Bonds are required to be surrendered to the corporate office of the Trustee, on the Redemption Date at the following location. If payment is to be made to a person other than the Owner, the Bonds shall be accompanied by a written instrument of transfer duly executed by the Owner thereof or by his attorney duly authorized in writing. If the Bonds are mailed, the use of registered, insured mail is recommended:
First Class/Registered/Certified
The Bank of New York Mellon
Global Corporate Trust
P.O. Box 396
East Syracuse, New York 13057
Express Delivery Only
The Bank of New York Mellon
Global Corporate Trust
111 Sanders Creek Parkway
East Syracuse, New York 13057
By Hand Only
The Bank of New York Mellon
Global Corporate Trust
Corporate Trust Window
101 Barclay Street 1st Floor East
New York, New York 10286
Successor Agency to the Hercules Redevelopment Agency
By: The Bank of New York Mellon Trust Company, N.A.
as Escrow Bank and Trustee
Bondholder Communications: 800-254-2826
If the Owner of any Bond subject to optional redemption fails to deliver such Bond to the Trustee on the Redemption Date, such Bond shall nevertheless be deemed redeemed on the Redemption Date and 216
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the Owner of such Bond shall have no rights in respect thereof except to receive payment of the Redemption Price from funds held by the Trustee for such payment.
Redemption of the Bonds is conditional upon the receipt by the Trustee on or prior to the Redemption Date of moneys sufficient to pay the principal of and interest with respect to such Bonds to be redeemed and, if such moneys have not been so received, this notice shall be of no force and effect and the Trustee shall not be required to redeem such Bonds. Any Bonds delivered for redemption shall be returned to the respective Owners thereof and said Bonds shall remain outstanding as though this conditional notice of redemption had not been given.
A form W-9 must be submitted with the Bonds. Failure to provide a completed form W -9, or certify the proper tax identification number will result in backup withholding under Section 3406 of the Internal Revenue Code of 1986, as amended.
The Successor Agency to the Hercules Redevelopment Agency and the Trustee shall not be responsible for the selection or use of the CUSIP numbers selected, nor is any representation made as to their correctness indicated in the notice or as printed on any Bond. They are included for the convenience of the holders
THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A., as Trustee
DATED this _____ day of _____, 2022.
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SUCCESSOR AGENCY TO THE
HERCULES REDEVELOPMENT AGENCY
TAX ALLOCATION REFUNDING
BONDS, SERIES 2022A
TAX ALLOCATION REFUNDING BONDS,
SERIES 2022B
(FEDERALLY TAXABLE)
BOND PURCHASE AGREEMENT
[Pricing Date]
Successor Agency to the
Hercules Redevelopment Agency
111 Civic Drive
Hercules, California 94547
Ladies and Gentlemen:
Stifel, Nicolaus & Company, Incorporated (the “Underwriter”) offers to enter into this Bond Purchase Agreement (this “Bond Purchase Agreement”) with the Successor Agency to the Hercules Redevelopment Agency (the “Successor Agency”), which will be binding upon the Successor Agency and the Underwriter upon the acceptance hereof by the Successor Agency. This offer is made subject to its acceptance by the Successor Agency by execution of this Bond Purchase Agreement and its delivery to the Underwriter on or before 11:59 p.m., California time, on the date hereof.
The Successor Agency acknowledges and agrees that: (i) the purchase and sale of the Bonds (as hereinafter defined) pursuant to this Bond Purchase Agreement is an arm’s -length commercial transaction between the Successor Agency and the Underwriter; (ii) in connection therewith and with the discussions, undertakings and procedures leading up to the consummation of such transaction, the Underwriter is and has been acting solely as principal and is not acting as a Municipal Advisor (as defined in Section 15B of the Securities Exchange Act of 1934, as amended (the “ Exchange Act”)), and the Underwriter is not acting as a financial advisor or fiduciary to the Successor Agency and has not assumed an advisory or fiduciary responsibility in favor of the Suc cessor Agency with respect to the offering of the Bonds or the process leading thereto (whether or not the Underwriter has advised or is currently advising the Successor Agency on other matters); (iii) the only obligations the Underwriter has to the Successor Agency with respect to the transaction contemplated hereby expressly are set forth in this Bond Purchase Agreement; (iv) the Successor Agency has consulted its own legal, accounting, tax, financial, municipal and other advisors to the extent it has deemed appropriate; (v) the Underwriter has financial interests that may differ from and be adverse to those of the Successor Agency; and (vi) the Underwriter has provided the Successor Agency with certain disclosures required under the rules of the Municipal Securities Rulemaking Board (the “MSRB”). The Successor Agency acknowledges and represents that it has engaged Urban Futures, Inc. as its municipal advisor (as defined in Securities and Exchange Commission Rule 15Ba1) and will rely on the financial advice of Urban Futures, Inc.. with respect to the Bonds. The Successor Agency hereby acknowledges receipt from the Underwriter of disclosures required by the MSRB Rule G-17, relating to the Underwriter’s role in the transaction, the Underwriter’s compensation, conflict disclosures, if any, and complex municipal securities financing, if any.
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Terms not otherwise defined herein shall have the same meanings as set forth in the Indenture, described below.
1. Purchase and Sale; Use of Proceeds . Upon the terms and conditions and in reliance upon the representations, warranties and covenants herein, the Successor Agency hereby agrees to sell to the Underwriter and the Underwriter hereby agrees to purchase from the Successor Agency for offering to the public, all (but not less than all) of the (i) $[PARA] Successor Agency to the Hercules Redevelopment Agency Tax Allocation Refunding Bonds, Series 2022A (the “Series 2022A Bonds”), at the purchase price of $_______ being the principal amount of the Series 2021A Bonds of $[PARA], less an Underwriter’s discount of $______, and plus original issue premium of $________, and (ii) $[PARB] Successor Agency to the Hercules Redevelopment Agency Tax Allocation Refunding Bonds, Series 2022B (Federally Taxable) (the “Series 2022B Bonds” and together with the Series 2022A Bonds, the “ Bonds”), at the purchase price of $_______ being the principal amount of the Series 2022A Bonds of $[PARB], less an Underwriter’s discount of $______, and plus original issue premium of $________. [The Successor Agency acknowledges that the Underwriter will on the Closing Date (as such term is defined herein), on behalf of the Successor Agency, wire a portion of the purchase price for the [Bonds] in the total amount of $_____, as the premiums for the 2022 Insurance Policy and 2022 Reserve Policy (as such terms are defined herein), directly to _______ (the “2022 Insurer”).
The Bonds shall be dated the Closing Date, and shall bear interest at the rates, shall mature on the dates and in the principal amounts and shall be subject to redemption, all as set forth in the attached Exhibit A.
The proceeds of the Series 2022A Bonds will be used by the Successor Agency to (i) refund all of the outstanding Hercules Redevelopment Agency, Hercules Merged Project Area, Tax Allocation Bonds, Series 2005 (the “ 2005 Bonds ”), all of the outstanding Hercules Redevelopment Agency, Hercules Merged Project Area, Tax Allocation Bonds, 2007 Series A (the “2007A Bonds”), and all of the outstanding Hercules Red evelopment Agency, Hercules Merged Project Area, Housing Tax Allocation Bonds, 2007 Series B (the “2007B Bonds”), [(ii) pay an allocable portion of the premiums for the municipal bond insurance policy to be issued by the 2022 Insurer insuring the [Bonds] ( the “2022 Insurance Policy”) and the Municipal Bond Debt Service Reserve Insurance Policy to be issued by the 2022 Insurer guaranteeing certain payments into the Reserve Account with respect to the Bonds (the “2022 Reserve Policy”)], and (iii) pay the costs of issuing the Series 2022A Bonds.
The proceeds of the Series 2022B Bonds will be used by the Successor Agency to refund all of the outstanding Hercules Redevelopment Agency, Hercules Merged Project Area, Housing Tax Allocation Bonds, 2007 Ser ies A (Taxable) (the “ 2007 Housing Bonds” and together with the 2005 Bonds, the 2007A Bonds, and the 2007B Bonds, the “ Prior Obligations ”), [(ii) pay an allocable portion of the premiums for the 2022 Insurance Policy and the 2022 Reserve Policy], and (iii) pay the costs of issuing the Series 2022A Bonds.
The Bonds are special, limited obligations of the Successor Agency, payable from, and secured by a lien on Pledged Tax Revenues, as such term is defined in an Indenture of Trust, dated as of _________ 1, 2022 (the “Indenture”), by and between the Successor Agency and the Trustee.
Each series of Prior Obligations will be refunded pursuant to an Escrow Agreement for such series Escrow Agreements, by and between the Successor Agency and The Bank of New York Mellon Trust Company, N.A., as Escrow Bank (collectively, the “Escrow Agreements”).
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The Bonds were authorized to be issued by a resolution of the Successor Agency, adopted on [January 11, 2022] (the “Successor Agency Bond Resolution”), and a resolution of the Contra Costa Countywide Oversight Board, adopted on [January 24, 2022] (the “Oversight Board Resolution”).
2. Bona Fide Public Offering. It shall be a condition to the Successor Agency’s obligations to sell and to deliver the Bonds to the Underwriter and to the Underwriter’s obligations to purchase, to accept delivery of and to pay for the Bonds that the entire aggregate principal amount of the Bonds shall be issued, sold and delivered by the Successor Agency and purchased, accepted and paid for by the Underwriter at the Closing. The Underwriter agrees to make a bona fide public offering of all of the Bonds at the initial public offering prices or yields set forth in Exhibit A hereto and on the inside front cover page of the Official Statement.
3. Official Statement . The Successor Agency shall deliver or cause to be delivered to the Underwriter promptly after acceptance of this Bond Purchase Agreement copies of the Official Statement relating to the Bonds, dated the date hereof (which, together with all exhibits and appendices included therein or attached thereto and with such amendments or supplements thereto which shall be approved by the Underwriter, the “Official Statement”). The Successor Agency authorizes the Official Statement, including the cover page and Appendices thereto and the information contained therein, to be used in connection with the sale of the Bonds and ratifies, confirms and approves the use and distribution by the Underwriter for such purpose, prior to the date her eof, of the Preliminary Official Statement dated [POS Date] (the “Preliminary Official Statement ”). The Successor Agency authorized distribution of the Preliminary Official Statement and preparation and distribution of a final Official Statement pursuant to a resolution adopted on [February 22], 2022 (the “ Successor Agency OS Resolution ,” together with t he Successor Agency Bond Resolution, the “ Successor Agency Resolutions”).
The Successor Agency has deemed such Preliminary Official Statement final as of its date for purposes of Rule 15c2-12 under the Securities Exchange Act of 1934, as amended (“Rule 15c2-12”), except for information allowed to be omitted by Rule 15c2 -12. The Successor Agency also agrees to deliver to the Underwriter, at the Successor Agency’s sole cost and at such address as the Underwriter shall specify, as many copies of the Official Statement as the Underwriter shall reasonably request as necessary to comply with paragraph (b)(4) of Rule 15c2-12 and with Rule G-32 and all other applicable rules of the MSRB. The Successor Agency agrees to deliver such copies of the Official Statement within seven (7) business days after the date hereof. Such Official Statement shall contain all information previously permitted to be omitted by Rule 15c2 -12. The Underwriter agrees to give written notice to t he Successor Agency of the date after which the Underwriter shall no longer be obligated to deliver Official Statements pursuant to paragraph (b)(4) of Rule 15c2 -12 which shall be no later than 25 days after the End of the Underwriting Period (as such term is hereinafter defined).
The Underwriter agrees to promptly file a copy of the final Official Statement, including any supplements prepared by the Successor Agency, in compliance with MSRB Rule G -32, and to take any and all other actions necessary to com ply with applicable Securities and Exchange Commission (the “ SEC”) rules and MSRB rules governing the offering, sale and delivery of the Bonds to the ultimate purchasers thereof.
4. Representations, Warranties and Agreements of the Successor Agency. The Successor Agency represents and warrants to the Underwriter that, as of the date hereof:
(a) The Successor Agency is a public entity existing under the laws of the State of California (the “State”), and is authorized, among other things, to (i) issue the Bonds, and (ii) secure the Bonds in the manner contemplated by the Indenture.
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(b) The Successor Agency has the full right, power and authority to (i) enter into the Indenture, the Escrow Agreements, the Disclosure Certificate (as hereinafter defined) and this Bond Purchase Agreement, (ii) issue, sell and deliver the Bonds to the Underwriter as provided herein, and (iii) carry out and consummate all other transactions on its part contemplated by each of the aforesaid documents, and the Successor Agency has complied with all provisions of applicable law in all matters relating to such transactions.
(c) The Successor Agency has duly authorized (i) the execution and delivery of the Bonds and the execution, delivery and due performance by the Successor Agency of the Escrow Agreements, the Disclosure Certificate, this Bond Purchase Agreement and the Indenture, (ii) the distribution and use of the “deemed final” Preliminary Official Statement and the execution, delivery and distribution of the final Official Statement, and (iii) the taking of any and all such action as may be required on the part of the Successor Agency to carry out, give effect to and consummate the transactions on its part contemplated by such instruments. All consents or approvals necessary to be obtained by the Successor Agency in connection with the foregoing have been received, and the consents or approvals so received are still in full force and effect.
(d) The information contained in the Preliminary Official Statement (excluding therefrom for any information relating to the [2022 Insurer, the 2022 Insurance Policy, the 2022 Reserve Policy,] The Depository Trust Company (“ DTC”) and its book -entry system included therein and the information therein under the caption [“UNDERWRITING”]) is true and correct in all material respects, and the Preliminary Official Statement did not on the date thereof contain any untrue or misleading statement of a material fact relating to the Successor Agency or the City of Hercules, California (the “City”) or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(e) The information contained in the Official Statement (excluding therefrom for any information relating to [the 2022 Insurer, the 2022 Insurance Policy, the 2022 Reserve Policy,] DTC and its book -entry system included therein and the information therein under the caption [“UNDERWRITING”]) is true and correct in all material respects, and the Official Statement does not contain any untrue or misleading statement of a material fact r elating to the Successor Agency or the City or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(f) Neither the execution and delivery by the Successor Agen cy of the Indenture, the Escrow Agreements, the Disclosure Certificate, this Bond Purchase Agreement and of the Bonds nor the consummation of the transactions on the part of the Successor Agency contemplated herein or therein or the compliance with the provisions hereof or thereof will conflict with, or constitute on the part of the Successor Agency a violation of, or a breach of or default under, (i) any statute, indenture, mortgage, note or other agreement or instrument to which the Successor Agency is a party or by which it is bound, (ii) any provision of the State Constitution, or (iii) any existing law, rule, regulation, ordinance, judgment, order or decree to which the Successor Agency (or the members of the Successor Agency or any of its officers in their respective capacities as such) is subject.
(g) The Successor Agency has never been in default at any time, as to payment of principal of or interest on any debt obligation which it has issued, except as otherwise specifically disclosed in the Preliminary Official Statement and the Official Statement; and the Successor Agency has not entered into any contract or arrangement of any kind which might give rise to any lien or encumbrance on the Pledged Tax Revenues except as is expressly disclosed in the Preliminary Official Statement and the Official Statement.
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(h) As of the date hereof , there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, public board or body, which has been served on the Successor Agency or, to the best knowledge of the Successor Agency, threatened, which in any way questions the powers of the Successor Agency referred to in paragraph (b) above, or the validity of any proceeding taken by the Successor Agency in connection with th e issuance of the Bonds, or wherein an unfavorable decision, ruling or finding could materially adversely affect the transactions contemplated by the Escrow Agreements, this Bond Purchase Agreement or the Indenture, or which, in any way, could adversely affect the validity or enforceability of the Indenture, the Bonds, the Escrow Agreements, the Disclosure Certificate or this Bond Purchase Agreement or, to the knowledge of the Successor Agency, which in any way questions the status of the Bonds under state tax laws or federal tax law or regulations or which in any way could materially adversely affect the availability of Pledged Tax Revenues.
(i) Any certificate signed by any official of the Successor Agency and delivered to the Underwriter in connection with the offer or sale of the Bonds shall be deemed a representation and warranty by the Successor Agency to the Underwriter as to the truth of the statements therein contained.
(j) The Successor Agency will furnish such information, execute su ch instruments and take such other action in cooperation with the Underwriter and at the expense of the Underwriter as the Underwriter may reasonably request in order (i) to qualify the Bonds for offer and sale under the Blue Sky or other securities laws a nd regulations of such states and other jurisdictions of the United States as the Underwriter may designate and (ii) to determine the eligibility of the Bonds for investment under the laws of such states and other jurisdictions, and will use its best effor ts to continue such qualifications in effect so long as required for the distribution of the Bonds, provided; however, that the Successor Agency will not be required to execute a special or general consent to service of process or qualify as a foreign corporation in connection with any such qualification in any jurisdiction.
(k) All authorizations, approvals, licenses, permits, consents, elections, and orders of or filings with any governmental authority, legislative body, board, agency or commission having jurisdiction in the matters which are required by the Closing Date for the due authorization of, which would constitute a condition precedent to or the absence of which would adversely affect the due performance by the Successor Agency of, its obligations in connection with the Indenture have been duly obtained or made and are in full force and effect.
(l) Between the date of this Bond Purchase Agreement and the Closing Date, the Successor Agency will not offer or issue any bonds, notes or other obligations fo r borrowed money not previously disclosed to the Underwriter.
(m) The Successor Agency will apply the proceeds of the Bonds in accordance with the Indenture.
(n) Except as otherwise described in the Preliminary Official Statement and the Official Statement, as of the Closing Date, the Successor Agency will not have outstanding any indebtedness which indebtedness is secured by a lien on the Pledged Tax Revenues of the Successor Agency on a parity with or senior to the lien provided for in the Indenture on the Pledged Tax Revenues.
(o) Except as described in the Preliminary Official Statement and the Official Statement, neither the Successor Agency, the City nor any other related entities have failed, within the last five years, to comply in all material respects with any undertaking of the Successor Agency pursuant to Rule 15c2-12. The report of Lumesis, Inc. dated _______, 2022 identifies all of the issues for which 222
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the Successor Agency , the City and their related entities were obligated to provide continuing disclosure under Rule 15c2-12 during the past five years and all of the material event filings that were required with respect to such issues during the five-year period.
(p) If between the date hereof and the date which is 25 days after the End of the Underwriting Period , as defined herein, for the Bonds, an event occurs which would cause the information contained in the Official Statement, as then supplemented or amended, to contain an untrue statement of a material fact or to omit to state a material fact required to be stated therein or necessary to make such information herein, in the light of the circumstances under which it was presented, not misleading, the Successor Agency will notify the Underwriter, and, if in the opinion of the Underwriter or the Successor Agency, or respective counsel, such event requires the preparation and publication of a supplement or amendment to the Official Statement, the Successor Agency will cooperate in the preparation of an amendment or supplement to the Official Statement in a form and manner approved by the Underwriter, and shall pay all expenses thereby incurred. For the purposes of this subsection, between the date hereof and the date which is 25 days after the End of the Underwriting Period for the Bonds, the Successor Agency will furnish such information with respect to itself as the Underwriter may from time to time reasonably request. As used herein, the term “End of the Underwriting Period” means the later of such time as: (i) the S uccessor Agency delivers the Bonds to the Underwriter; or (ii) the Underwriter does not retain, directly or as a member of an underwriting syndicate, an unsold balance of the Bonds for sale to the public. Notwithstanding the foregoing, unless the Underwriter gives notice to the contrary, the “End of the Underwriting Period” shall be the Closing Date.
(q) If the information contained in the Official Statement is amended or supplemented pursuant to paragraph ( p) hereof, at the time of each supplement or amendment thereto and (unless subsequently again supplemented or amended pursuant to such subparagraph) at all times subsequent thereto up to and including the date which is 25 days after the End of the Underwriting Period for the Bonds, the portions of t he Official Statement so supplemented or amended (including any financial and statistical data contained therein) will not contain any untrue statement of a material fact required to be stated therein or necessary to make such information therein in the li ght of the circumstances under which it was presented, not misleading.
(r) The Oversight Board has duly adopted the Oversight Board Resolution approving the Successor Agency Bond Resolution and the issuance of the Bonds and no further Oversight Board approval or consent is required for the issuing of the Bonds or the consummation of the transactions described in the Preliminary Official Statement.
(s) The Department of Finance of the State (the “Department of Finance”) has issued a letter dated __________, 2022 (the “DOF Letter”), approving the issuance of the B onds. No further Department of Finance approval or consent is required for the issuance of the Bonds or the consummation of the transactions described in the Preliminary Official Statement. The Successor Agency has received its Finding of Completion from the Department of Finance. Except as disclosed in the Official Statement, the Successor Agency is not aware of the Department of Finance directing or having any basis to direct the Auditor -Controller of the County of Contra Costa to deduct unpaid unencumbered funds from future allocations of property tax to the Successor Agency pursuant to Section 34183 of the Dissolution Act.
(t) As of the time of acceptance hereof, the Successor Agency has complied with the filing requirements of the Dissolution Act , including, without limitation, the filing of all Recognized Obligation Payment Schedules, as required by the Dissolution Act.
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5. Covenants of the Successor Agency. The Successor Agency covenants with the Underwriter as of the Closing Date as follows:
(a) The Successor Agency covenants and agrees that it will execute a continuing disclosure certificate, constituting an undertaking to provide ongoing disclosure about the Successor Agency, for the benefit of the owners of the Bonds as required by Section (b)(5)(i) of Rule 15c2 -12, substantially in the form attached to the Preliminary Official Statement (the “Disclosure Certificate”).
(b) Any information supplied by the Successor Agency for inclusion in any amendment s or supplements to the Preliminary Official Statement or the Official Statement will not contain any untrue or misleading statement of a material fact relating to the Successor Agency or omit to state any such fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
6. Closing. (a) At 8:00 A.M., on [Closing Date], or on such earlier or later time or date as may be agreed upon by the Underwriter and the Successor A gency (the “ Closing Date”), the Successor Agency will deliver the Bonds to the Underwriter, through the book -entry system of DTC. The activities relating to the execution and delivery of the Bonds, opinions and other instruments as described in Section 7 of this Bond Purchase Agreement shall occur on the Closing Date. The delivery of the certificates, opinions and documents as described herein shall be made at the offices of Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California (“ Bond Counsel”), or at such other place as shall have been mutually agreed upon by the Successor Agency and the Underwriter. Such delivery is herein called the “Closing.” On the date of the Closing, the Underwriter will pay the purchase price of the Bonds as set forth in Section 1 of this Bond Purchase Agreement in immediately available funds to the order of the Trustee.
(b) The Bonds will be issued in fully registered form and will be prepared and delivered as one Bond for each maturity registered in the name of a nominee of DTC. It is anticipated that CUSIP identification numbers will be inserted on the Bonds, but neither the failure to provide such numbers nor any error with respect thereto will constitute a cause for failure or refusal by the Underwriter to accept delivery of the Bonds in accordance with the terms of this Bond Purchase Agreement.
7. Closing Conditions. The obligations of the Underwriter hereunder shall be subject to the performance by the Successor Agency of its obligations hereunder at or prior to the Closing Date and are also subject to the following conditions:
(a) the representations, warranties and covenants of the Successor Agency contained herein shall be true and correct in all material respects as of the Closing Date;
(b) as of the Closing Date, there shall have been no material adverse change in the financial condition of the Successor Agency that is not disclosed in the Preliminary Official Statement or the Official Statement;
(c) as of the Closing Date, all official action of the Successor Agency relating to this Bond Purchase Agreement, the Disclosure Certificate, the Escrow Agreements and the Indenture shall be in full force and effect;
(d) as of the Closing Date, the Underwriter shall receive the following certificates, opinions and documents, in each case satisfactory in form and substance to the Underwriter:
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(i) a copy of the Indenture, as duly executed and delivered by the Successor Agency and the Trustee;
(ii) a copy of the Disclosure Certificate, as duly executed and delivered by the Successor Agency;
(iii) copies of the Escrow Agreements, duly executed and delivered by the Successor Agency and The Bank of New York Mellon Trust Company, N.A., as Escrow Bank;
(iv) an opinion of Bond Counsel, dated the Closing Date and addressed to the Underwriter, in the form attached as [Appendix C] to the Official Statement;
(v) a certificate, dated the Closing Date, of the Successor Agency executed by the Executive Director of the Successor Agency (or other duly appointed officer of the Successor Agency authorized by resolution of the Successor Agency) to the effect that (A) there is no action, suit, proceeding or investigation at law or in equity before or by any court, public board or body which has been served on the Successor Agency or, to the knowledge of the Successor Agency, threatened against or affecting the Successor Agency to restrain or enjoin the Successor Agency’s participation in, or in any way contesting the existence of the Successor Agency or the powers of the Successor Agency with respect to, the transactions contemplated by the Escrow Agreements, this Bond Purchase Agreement or the Indenture, and consummation of such transactions; (B) the representations and warranties of the Successor Agency contained in this Bond Purchase Agreement are true and correct in all material respects, and the Successor Agency has complied with all agreements and covenants and satisfied all conditions to be satisfied at or prior to the Closing Date as contemplated by the Escrow Agreements, the Indenture and this Bond Purchase Agreement; (C) no event affecting the Successor Agency has occurred since the date of the Official Statement which has not been disclosed therein or in any supplement or amendment thereto which event should be disclosed in the Official Statement in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; (D) no further consent is required to be obtained for the inclusion of the audited financial statements of the Successor Agency for the fiscal year ended [June 30, 2020], as [Appendix E] to the Official Statement; (E) the refunding of the outstanding Prior Obligations with the proceeds of the Bonds will achieve debt service savings in compliance with the parameters set forth in §34177.5(a) of the Health and Safety Code of the State of California in that (i) the total interest cost to maturity on the Bonds plus the prin cipal amount of the Bonds shall not exceed the total remaining interest cost to maturity on the outstanding Prior Obligations plus the remaining principal amount of the outstanding Prior Obligations, and (ii) the principal amount of the Bonds shall not exc eed the amount required to defease the outstanding Prior Obligations, to establish customary debt service reserves, and to pay related costs of issuance, as evidenced by the pertinent debt service schedules attached to such certificate ; and (F) all costs of issuance being paid from proceeds constitute related costs of issuance within the meaning of Section 34177.5(a) of the Health and Safety Code and all Costs of Issuance are properly chargeable to the Bonds in accordance with proper governmental accountin g principles;
(vi) an opinion of the City Attorney, as counsel to the Successor Agency, dated the Closing Date and addressed to the Successor Agency and the Underwriter to the effect that:
(A) the Successor Agency is a public body, organized and existi ng under the laws of the State;
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(B) the Successor Agency has full legal power and lawful authority to enter into the Indenture, the Escrow Agreements and this Bond Purchase Agreement, and to execute and deliver the Disclosure Certificate;
(C) the Successor Agency Resolutions were duly adopted at meeting s of the governing body of the Successor Agency, which were called and held pursuant to the law and with all public notice required by law and at which a quorum was present and acting throughout, and the Successor Agency Resolutions are in full force and effect and have not been modified, amended or rescinded;
(D) the Indenture, the Escrow Agreements, the Disclosure Certificate, and this Bond Purchase Agreement have been duly authorized, executed an d delivered by the Successor Agency and, assuming due authorization, execution and delivery by the other parties thereof, constitute the valid, legal and binding agreements of the Successor Agency enforceable in accordance with their terms , except as enfor cement may be limited by bankruptcy, insolvency, reorganization moratorium or similar laws or equitable principles relating to or limiting creditors’ rights generally;
(E) the information in the Preliminary Official Statement and the Official Statement u nder the captions [“INTRODUCTORY STATEMENT – The City and Agency,” “– The Redevelopment Plan,” “ – Senior Obligations,” “SECURITY FOR THE 202 2 BONDS,” “THE SUCCESOR AGENCY TO THE HERCULES REDEVELOPMENT AGENCY ,” and “THE PROJECT AREA,” ] insofar as such statements purport to summarize information with respect to the Successor Agency, the [Project Area (as defined therein) ] and the Successor Agency’s tax sharing and other obligations with respect to the Project Area, fairly and accurately summarizes the information presented therein; and
(F) to the best knowledge of the City Attorney after due inquiry, except as otherwise disclosed in the Official Statement, there is no litigation, action, suit, proceeding or investigation (or any basis therefor) at law or in equity before or by any court, governmental agency or body, pending by way of a summons served against the Successor Agency or, to the knowledge of the City Attorney , threatened in writing against the Successor Agency, challenging the creation, organization or existence of the Successor Agency, or the validity of the Indenture, the Escrow Agreements, the Disclosure Certificate or this Bond Purchase Agreement or seeking to restrain or enjoin any of the transactions referred to therein or contemplated thereby or contesting the authority of the Successor Agency to enter into or perform its obligations under the Indenture, the Escrow Agreements, the Disclosure Certificate or this Bond Purchase Agreement, or under which a determination adverse to the Successor Agency would have a material adverse effect upon the availability of Pledged Tax Revenues, or which, in any manner, questions the right of the Successor Agency to enter into, and perform under, the Indenture, the Escrow Agreements, the Disclosure Certificate or this Bond Purchase Agreement;
(G) Without having undertaken to determine independently or assuming any responsibility for the accuracy, completeness or fairness of the statements contained in the Preliminary Official Statement and the Official Statement, nothing has come to the attention of the City Attorney which would lead the City Attorney to believe that the Preliminary Official Statement and the Official Statement as of their respective dates or the Closing Date (excluding therefrom the financial information and 226
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the statistical data included thereon included in the Preliminary Official Statement and the Official Statement, as to which no opinion is expressed) contain any untrue statement of a material fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstance under which they were made, not misleading.
The City Attorney opinion may provide that (i) the opinions may be affected by actions taken or events occurring after the date of the opinion, (ii) as to questions of fact material to its opinions, the City Attorney has relied upon representations by the principal officers of the City, (iii) whenever a statement in the City Attorney opinion is qualified by "to the knowledge of the City Attorney" or similar statement, it is intended to indicate that, during the course of the City Attorney’s representation of the City in connection with the transactions described in the City Attorney opinion, no information that would give the City Attorney current actual knowledge of the inaccuracy of such statement has come to its attention, and (iv) no opinion is expressed with regard to any laws other than laws of the State of California, and no opinion is expressed as to matters covered by any tax or securities law or regulation.
(vii) an opinion of counsel to The Bank of New York Mellon Trust Company, N.A. (“BNY”), dated the Closing Date and addressed to the Successor Agency and the Underwriter, to the effect that:
(A) BNY is a national banking association organized and existing under the laws of the United States of America, having full power to enter into, accept and administer the trust created under the Indenture and the Escrow Agreements;
(B) the Indenture and the Escrow Agreements have been duly authorized, executed and delivered by BNY and each of the Indenture and the Escrow Agreements constitutes a legal, valid and binding obligation of BNY enforceable in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency or other laws affecting the enforcement of creditors’ rights generally and by the application of equitable principles, if equitable remedies are sought;
(C) no consent, approval, authorization or other action by any governmental or regulatory authority having jurisdiction over BNY that has not been obtained is or will be required for the execution and delivery of the Indenture and the Escrow Agreements or the consummation of the transactions contemplated by the Indenture and the Escrow Agreements; and
(D) BNY has duly authenticated the Bonds.
(viii) a certificate, dated the Closing Date, of BNY, signed by a duly authorized officer of BNY, to the effect that (A) BNY is duly organized and validly existing as a national banking association, with full corporate power to undertake the trust of the Indenture and the Escrow Agreements; (B) BNY has duly authorized, executed and delivered the Inde nture and the Escrow Agreements and by all proper corporate action has authorized the acceptance of the trust of the Indenture and Escrow Agreements; and (C) to the officer’s knowledge, there is no action, suit, proceeding or investigation at law or in equity before or by any court, public board or body which has been served on the Trustee (either in state or federal courts), or to the knowledge of BNY which would restrain or enjoin the execution or delivery of the Indenture or the Escrow Agreements, or which would affect the validity or enforceability of the Indenture or the Escrow Agreements, or BNY’s participation in, or in any way contesting the powers or the authority of 227
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BNY with respect to, the transactions contemplated by the Indenture or the Escrow Agreements, or any other agreement, document or certificate related to such transactions;
(ix) a supplemental opinion of Bond Counsel, dated the Closing Date and addressed to the Successor Agency and the Underwriter, to the effect that:
(A) this Bond Purchase Agreement , the Disclosure Certificate and the Escrow Agreements have been duly authorized, executed and delivered by the Successor Agency, and assuming the valid execution and delivery by the other parties thereto, are valid and binding upon the S uccessor Agency, subject to the laws relating to bankruptcy, insolvency, reorganization of creditors ’ rights generally and to the application of equitable principles;
(B) the Bonds are exempt from registration pursuant to Section 3(a)(2) of the Securities Act of 1933, as amended, and the Indenture is exempt from qualification pursuant to the Trust Indenture Act of 1939, as amended; and
(C) the statements contained in the Official Statement under the captions [“THE 2022 BONDS,” “SECURITY FOR THE 2022 BONDS,” “TAX MATTERS” and “APPENDIX B – SUMMARY OF THE INDENTURE ”] thereto are accurate insofar as such statements purport to expressly summarize certain provisions of the Bonds, the Indenture and Bond Counsel ’s opinion concerning federal tax matters relating to the Bonds;
(x) a letter of Stradling Yocca Carlson & Rauth, A Professional Corporation, Newport Beach, California, as disclosure counsel to the Successor Agency, dated the Closing Date and addressed to the Underwriter in substantially the form attached hereto as Exhibit B;
(xi) the opinion of Underwriter’s counsel satisfactory to the Underwriter;
(xii) the final Official Statement executed by an authorized officer of the Successor Agency;
(xiii) certified copies of the Successor Agency Resolution s and the Oversight Board Resolution;
(xiv) specimen Bonds;
(xv) satisfactory evidence that the Bonds have been assigned the ratings disclosed in the Official Statement;
(xvi) a certificate of an officer of RSG, Inc. , as fiscal consultant (the “ Fiscal Consultant”), dated the date of the Closing, addressed to the Successor Agency and the Underwriter, to the effect that, to the best of its knowledge, the assessed valuations and other fiscal information contained in the Official Statement, including such firm’s Fiscal Consultant’s Report attached thereto as [Appendix A], are presented fairly and accurately, and consenting to the use of its report as [Appendix A] to the Preliminary Official Statement and the Official Statement;
(xvii) evidence of required filings with the California Debt and Investment Advisory Commission;
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(xviii) a copy of the DOF Letter;
(xix) a certificate, dated the Closing Date, signed by a duly authorized official of Urban Futures, Inc., as municipal advisor to the Successor Agency (the “Municipal Advisor”) to the effect that, (A) in connection with its participation in the preparation of the Preliminary Official Statement and the Official Statement and without undertaking any indep endent investigation and without having undertaken to determine independently the fairness, accuracy or completeness of the statements contained in the Preliminary Official Statement or the Official Statement, nothing has come to the attention of the Municipal Advisor that would lead it to believe that the statements and information contained in the Preliminary Official Statement as of the date thereof and the date hereof and the Official Statement as of its date and the Closing Date contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading, (B) the refunding of the outstanding Prior Obligations with the proceeds of the Bonds will achieve debt service savings in compliance with the parameters set forth in §34177.5(a) of the Health and Safety Code of the State of California in that (i) the total interest cost to maturity on the Bonds pl us the principal amount of the Bonds shall not exceed the total remaining interest cost to maturity on the outstanding Prior Obligations plus the remaining principal amount of the outstanding Prior Obligations, and (ii) the principal amount of the Bonds shall not exceed the amount required to defease the outstanding Prior Obligations, to establish customary debt service reserves, and to pay related costs of issuance, as evidenced by the pertinent debt service schedules attached to such certificate, and (C) all costs of issuance being paid from proceeds constitute related costs of issuance within the meaning of Section 34177.5(a) of the Health and Safety Code and all Costs of Issuance are properly chargeable to the Bonds in accordance with proper governmental accounting principles;
(xx) a tax certificate with respect to maintaining the tax -exempt status of the Bonds, duly executed by the Successor Agency, together with a completed and executed Form 8038 - G, for the Bonds;
(xxi) a copy of the executed DTC Representation Letter;
[(xxii) a copy of the 2022 Insurance Policy and the 2022 Reserve Policy;]
[(xxiii) An opinion of counsel to the 2022 Insurer, in form and substance satisfactory to the Underwriter, Bond Counsel and Under writer’s Counsel, with respect to, among other matters, the 2022 Insurance Policy, the 2022 Reserve Policy and disclosures relating thereto in the Official Statement;]
[(xxiv) A certificate of the 2022 Insurer, in form and substance satisfactory to the Underwriter, Bond Counsel, and Underwriter’s Counsel, with respect to, among other matters, the 2022 Insurance Policy, the 2022 Reserve Policy and disclosures relating thereto in the Official Statement;] and
(xxv) such additional legal opinions, certificates, instruments and other documents as the Underwriter may reasonably deem necessary to evidence the truth and accuracy as of the time of the Closing Date of the representations and warranties of the Successor Agen cy contained in this Bond Purchase Agreement and the due performance or satisfaction by the Successor Agency at or prior to such time of all agreements then to be performed and all conditions then to be satisfied by the Successor Agency pursuant to this Bo nd Purchase Agreement.
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8. Establishment of Issue Price.
(a) The Underwriter agrees to assist the Successor Agency in establishing the issue price of the Series 2022A Bonds and shall execute and deliver to the Successor Agency at Closing an “issue price” or similar certificate, together with the supporting pricing wires or equivalent communications, substantially in the form attached hereto as Exhibit C, with such modifications as may be appropriate or necessary, in the reasonable judgment of the Underwriter, the Successor Agency and Bond Counsel, to accurately reflect, as applicable, the sales price or prices or the initial offering price or prices to the public of the Series 2022A Bonds.
(b) Except as otherwise set forth in Exhibit A attached hereto, the Successor Agency will treat the first price at which 10% of each maturity of the Series 2022A Bonds (the “10% test”) is sold to the public as the issue p rice of that maturity. At or promptly after the execution of this Bond Purchase Agreement, the Underwriter shall report to the Successor Agency the price or prices at which it has sold to the public each maturity of Bonds. If at that time the 10% test ha s not been satisfied as to any maturity of the Series 2022A Bonds, the Underwriter agrees to promptly report to the Successor Agency the prices at which it sells the unsold Bonds of that maturity to the public. That reporting obligation shall continue, whether or not the Closing has occurred, until either (i) the Underwriter has sold all Bonds of that maturity or (ii) the 10% test has been satisfied as to the Series 2022A Bonds of that maturity, provided that the Underwriter’s reporting obligation after the date of the Closing may be at reasonable periodic intervals or otherwise upon request of the Successor Agency or Bond Counsel.
For purposes of this Section, if Bonds mature on the same date but have different interest rates, each separate CUSIP number within that maturity will be treated as a separate maturity of the Series 2022A Bonds.
(c) The Underwriter confirms that it has offered the Series 2022A Bonds to the public on or before the date of this Bond Purchase Agreement at the offering price or prices (the “initial offering price”), or at the corresponding yield or yields, set forth in Exhibit A attached hereto, except as otherwise set forth therein. Exhibit A also sets forth, as of the date of this Bond Purchase Agreement, the maturities, if any, of the Series 2022A Bonds for which the 10% test has not been satisfied and for which the Successor Agency and the Underwriter agree that the restrictions set forth in the next sentence shall apply, which will allow the Successor Agency to treat the initial offeri ng price to the public of each such maturity as of the sale date as the issue price of that maturity (the “ hold-the- offering-price rule”). So long as the hold-the-offering-price rule remains applicable to any maturity of the Series 2022A Bonds, the Underw riter will neither offer nor sell unsold Bonds of that maturity to any person at a price that is higher than the initial offering price to the public during the period starting on the sale date and ending on the earlier of the following:
(1) the close of the fifth (5th) business day after the sale date; or (2) the date on which the Underwriter has sold at least 10% of that maturity of the Series 2022A Bonds to the public at a price that is no higher than the initial offering price to the public.
The Underwriter will advise the Successor Agency promptly after the close of the fifth (5th) business day after the sale date whether it has sold 10% of that maturity of the Series 2022A Bonds to the public at a price that is no higher than the initial offering price to the public. (d) The Underwriter confirms that:
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(i) any selling group agreement and any third-party distribution agreement relating to the initial sale of the Series 2022A Bonds to the public, together with the related pricing wires, contains or will contain language obligating each dealer who is a member of the selling group and each broker-dealer that is a party to such third-party distribution agreement, as applicable:
(A)(i) to report the prices at which it sells to the public the unsold Bonds of each maturity allocated to it, whether or not the Closing has occurred, until either all Bonds of that maturity allocated to it have been sold or it is notified by the Underwriter that the 10% test has been satisfied as to the Series 2022A Bonds of that maturity, provided that the reporting obligation after the date of the Closing may be at reasonable periodic intervals or otherwise upon request of the Underwriter, and (ii) to comply with the hold-the-offering-price rule, if applicable, if and for so long as directed by the Underwriter,
(B) to promptly notify the Underwriter of any sales of Bonds that, to its knowledge, are made to a purchaser who is a related party to an underwriter participating in the initial sale of the Series 2022A Bonds to the public (each such term being used as defined below), and
(C) to acknowledge that, unless otherwise advised by the dealer or broker -dealer, the Underwriter shall assume that each order submitted by the dealer or broker-dealer is a sale to the public.
(ii) any selling group agreement relating to the initial sale of the Series 2022A Bonds to the public, together with the related pricing wires, contains or will contain language obligating each dealer that is a party to a third-party distribution agreement to be employed in connection with the initial sale of the Series 2022A Bonds to the public to require each broker-dealer that is a party to such third-party distribution agreement to (A) report the prices at which it sells to the public the unsold Bonds of each maturity allocat ed to it, whether or not the Closing has occurred, until either all Bonds of that maturity allocated to it have been sold or it is notified by the Underwriter or the dealer that the 10% test has been satisfied as to the Series 2022A Bonds of that maturity, provided that the reporting obligation after the date of the Closing may be at reasonable periodic intervals or otherwise upon request of the Underwriter or the dealer, and (B) comply with the hold-the-offering-price rule, if applicable, if and for so long as directed by the Underwriter or the dealer and as set forth in the related pricing wires. (e) The Successor Agency acknowledges that, in making the representations set forth in this section, the Underwriter will rely on (i) in the event a selling group has been created in connection with the initial sale of the Series 2022A Bonds to the public, the agreement of each dealer who is a member of the selling group to comply with the requirements for establishing issue price of the Series 2022A Bonds, including, but not limited to, its agreement to comply with the hold -the-offering-price rule, if applicable to the Series 2022A Bonds, as set forth in a selling group agreement and the related pricing wires, and (ii) in the event that a third-party distribution agreement was employed in connection with the initial sale of the Series 2022A Bonds to the public, the agreement of each broker-dealer that is a party to such agreement to comply with the requirements for establishing issue price of the Series 2022A Bonds, including, but not limited to, its agreement to comply with the hold -the-offering-price rule, if applicable to the Series 2022A Bonds, as set forth in the third-party distribution agreement and the related pricing wires. The Successor Agency further acknowledges that the Underwriter shall not be liable for the failure of any dealer who is a member of a selling group, or of any broker-dealer that is a party to a third-party distribution agreement, to comply with its corresponding agreement to comply with the requirements for establishing issue price of the Series 2022A Bonds, including, but not limited 231
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to, its agreement to comply with the hold -the-offering-price rule, if applicable to the Series 2022A Bonds.
(f) The Underwriter acknowledges that sales of any Bonds to any person that is a related party to an underwriter participating in the initial sale of the Series 2022A Bonds to the public (each such term being used as defined below) shall not constitute sales to the public for purposes of this section. Further, for purposes of this section:
(i) “public” means any person other than an underwriter or a related party, (ii) “underwriter” means (A) any person that agrees pursuant to a written contract with the Successor Agency (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Series 2022A Bonds to the public and (B) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause ( A) to participate in the initial sale of the Series 2022A Bonds to the public (including a member of a selling group or a party to a third -party distribution agreement participating in the initial sale of the Series 2022A Bonds to the public), (iii) a pur chaser of any of the Series 2022A Bonds is a “related party” to an underwriter if the underwriter and the purchaser are subject, directly or indirectly, to (A) more than 50% common ownership of the voting power or the total value of their stock, if both en tities are corporations (including direct ownership by one corporation of another), (B) more than 50% common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another), or (C) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other), and
(iv) “sale date” means the date of execution of this Bond Purchase Agreement by all parties.
9. Termination. The Underwriter will have the right to terminate the Underwriter’s obligations under this Bond Purchase Agreement to purchase, to accept delivery of and to pay for the Bonds by notifying the Successor Agency of its election to do so if, after the execution hereof and prior to the Closing, any of the following events occurs:
(a) the marketability of the Bonds or the market price thereof, in the opinion of the Underwriter, has been materially and adversely affected by any decision issued by a court of the United States (including the United States Tax Court ) or of the State, by any ruling or regulation (final, temporary or proposed) issued by or on behalf of the Department of the Treasury of the United States, the Internal Revenue Service, or other governmental agency of the United States, or any governmenta l agency of the State, or by a tentative decision or announcement by any member of the House Ways and Means Committee, the Senate Finance Committee, or the Conference Committee with respect to contemplated legislation or by legislation enacted by, pending in, or favorably reported to either the House of Representatives or either House of the Legislature of the State, or formally proposed to the Congress of the United States by the President of the United States or to the Legislature of the State by the 232
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Governor of the State in an executive communication, affecting the tax status of the Successor Agency, its property or income, its bonds (including the Bonds) or the interest thereon or any tax exemption granted or authorized by the Internal Revenue Code of 1986, as amended, with respect to the Series 2021A Bonds;
(b) the United States becomes engaged in hostilities that result in a declaration of war or a national emergency, or any other outbreak of hostilities occurs, or a local, national or international calamity or crisis occurs, financial or otherwise, the effect of such outbreak, calamity or crisis being such as, in the reasonable opinion of the Underwriter, would affect materially and adversely the ability of the Underwriter to market the Bonds;
(c) there occurs a general suspension of trading on the New York Stock Exchange or the declaration of a general banking moratorium by the United States, New York State or State authorities;
(d) a stop order, ruling, regulation or official statement by, or on behalf of, the Securities and Exchange Commission is issued or made to the effect that the issuance, offering or sale of the Bonds is or would be in violation of any provision of the Securities Act of 1933, as then in effect, or of the Securities Exchange Act of 1934, as then in effect, or of the Trust Indenture Act of 1939, as then in effect;
(e) legislation is enacted by the House of Representatives or the Senate of the Congress of the United States of America, or a decision by a court of the United St ates of America is rendered, or a ruling or regulation by or on behalf of the Securities and Exchange Commission or other governmental agency having jurisdiction of the subject matter is made or proposed to the effect that the Bonds are not exempt from reg istration, qualification or other similar requirements of the Securities Act of 1933, as then in effect, or of the Trust Indenture Act of 1939, as then in effect;
(f) in the reasonable judgment of the Underwriter, the market price of the Bonds, or the market price generally of obligations of the general character of the Bonds, might be materially and adversely affected because additional material restrictions not in force as of the date hereof is imposed upon trading in securities generally by any governm ental authority or by any national securities exchange;
(g) the Comptroller of the Currency, The New York Stock Exchange, or other national securities exchange, or any governmental authority, imposes, as to the Bonds or obligations of the general charact er of the Bonds, any material restrictions not now in force, or increase materially those now in force, with respect to the extension of credit by, or the charge to the net capital requirements of, or financial responsibility requirements of the Underwriter;
(h) a general banking moratorium is established by federal, New York or State authorities;
(i) any legislation, ordinance, rule or regulation is introduced in or be enacted by any governmental body, department or agency in the State or a decision of a court of competent jurisdiction within the State is rendered, which, in the opinion of the Underw riter, after consultation with the Successor Agency, materially adversely affects the market price of the Bonds;
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(j) any federal or State court, authority or regulatory body takes action materially and adversely affecting the payment or receipt of the principal and interest on the Bonds;
(k) any withdrawal, downgrading or placement on credit watch negative of any underlying rating of any securities of the Successor Agency [or any rating of the 2022 Insurer] by a national municipal bond rating agency that , in the opinion of the Underwriter, adversely affects the market price of the Bonds;
(l) an event occurs which in the reasonable opinion of the Underwriter makes untrue or misleading in any material respect any statement or information contained in the O fficial Statement (other than any information relating to the Underwriter); or
(m) any change, which in the reasonable opinion of the Underwriter, materially adversely affects the marketability of the Bonds or, the financial condition of the Successor Agency.
10. Contingency of Obligations. The obligations of the Successor Agency hereunder are subject to the performance by the Underwriter of its obligations hereunder.
11. Duration of Representations, Warranties, Agreements and Covenants. All representations, warranties, agreements and covenants of the Successor Agency shall remain operative and in full force and effect, regardless of any investigations made by or on behalf of the Underwriter or the Successor Agency and shall survive the Closing Date.
12. Expenses. The Successor Agency will pay or cause to be paid all reasonable expenses incident to the performance of its obligations under this Bond Purchase Agreement, including, but not limited to, mailing or delivery of the Bonds, costs of printing the Bonds, prin ting, distribution and delivery of the Preliminary Official Statement, the Official Statement and any amendment or supplement thereto, the fees and disbursements of Bond Counsel, Disclosure Counsel, and counsel to the Successor Agency, the fees and expense s of the Successor Agency ’s accountants and fiscal consultants, fees of the Municipal Advisor, any fees charged by investment rating agencies for the rating of the Bonds and fees of the Trustee, and fees and expenses related to the Successor Agency’s staff time. In the event this Bond Purchase Agreement shall terminate because of the default of the Underwriter, the Successor Agency will, nevertheless, pay, or cause to be paid, all of the expenses specified above.
The Successor Agency shall reimburse the Underwriter, from proceeds of the Bonds, for any meals or travel expenses of the Successor Agency paid for by the Underwriter, exclusive of entertainment expenses.
The Underwriter shall pay the fees and expenses of any counsel retained by it, all advertising expenses incurred in connection with the public offering of the Bonds, CDIAC fees, CUSIP fees and all other expenses incurred by it in connection with the public offering and distribution of the Bonds (including out-of-pocket expenses and related regulatory expenses).
13. Notices. Any notice or other communication to be given to the Successor Agency under this Bond Purchase Agreement may be given by delivering the same in writing to the Executive Director, Successor Agency to the Hercules Redevelopment Agency , 111 Civic Drive, Hercules, California 94547, and any notice or other communication to be given to the Underwriter under this Bond Purchase Agreement may be given by delivering the same in wri ting to Stifel, Nicolaus & 234
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Company, Incorporated, One Montgomery Street, 35th Floor, San Francisco, California 94104 Attention: Eileen Gallagher, Managing Director.
14. Parties in Interest. This Bond Purchase Agreement is made solely for the benefit of the Successor Agency and the Underwriter (including the successors or assigns of the Underwriter) and no other person, including any purchaser of the Bonds, shall acquire or have any right hereunder or by virtue hereof.
15. Governing Law. This Bond Purchase Agreement shall be governed by and construed in accordance with the laws of the State applicable to contracts made and performed in California.
16. Headings. The headings of the paragraphs of this Bond Purchase Agreement are inserted for convenience of reference only and shall not be deemed to be a part hereof.
17. Severability. In case any one or more of the provisions contained herein shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision hereof.
18. Effectiveness. This Bond Purchase Agreement shall become effective upon acceptance hereof by the Successor Agency.
19. No Prior Agreements. This Bond Purchase Agreement supersedes and replaces all prior negotiations, agreements and understandings between the parties hereto in relation to the sale of Bonds, and any such negotiations, agreements and understandings shall be null and void upon the effectiveness of this Bond Purchase Agreement.
[Signature Page Follows on Next Page]
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S-1
20. Counterparts. This Bond Purchase Agreement may be executed in several counterparts which together shall constitute one and the same instrument.
Very truly yours,
STIFEL, NICOLAUS & COMPANY,
INCORPORATED
By:
Authorized Officer
Accepted and agreed to as of
the date first above written, and the time identified
below:
SUCCESSOR AGENCY TO THE
HERCULES REDEVELOPMENT AGENCY
By:
Executive Director
Time of Execution:
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A-2
EXHIBIT A
MATURITY SCHEDULES
Series 2022A Bonds
Maturity
(August 1)
Principal
Amount
Interest
Rate Yield Price
10% Test
Satisfied*
10% Test
Not
Satisfied
Subject to
Hold-The-
Offering-
Price Rule
_________________
T: Term Bond.
C: Priced to the first optional redemption date of August 1, 20__, at par. * At the time of execution of this Agreement and assuming orders are confirmed immediately after the execution of this Bond Purchase Agreement.
Series 2022B Bonds
Maturity
(August 1)
Principal
Amount
Interest
Rate Yield Price
_________________
T: Term Bond.
C: Priced to the first optional redemption date of August 1, 20__, at par.
237
A-3
REDEMPTION PROVISIONS
Optional Redemption. The 2022A Bonds maturing on or prior to August 1, 20__ are not subject to optional redemption. The 2022A Bonds maturing on or after August 1, 20__, are subject to optional redemption prior to their respective maturity dates as a whole, or in part by lot, on any date on or after August 1, 20__, by such maturity or maturities as shall be directed by the Successor Agency (or in absence of such direction, pro rata by maturity and by lot within a maturity), from any source of available funds.
Such optional redemption shall be at a redemption price equal to 100% of the principal amount to be redeemed, plus accrued but unpaid interest to the date fixed for redemption, without premium.
The 2022B Bonds maturing on or prior to August 1, 20__ are not subject to optional redemption.
The 2022B Bonds maturing on or after August 1, 20__, are subject to optional redemption prior to their respective maturity dates as a whole, or in part by lot, on any date on or after August 1, 20__, by such maturity or maturities as shall be directed by the Successor Agency (or in absence of such direction, pro rata by maturity and by lot within a maturity), from any source of available funds. Such optional redemption shall be at a redemption price equal to 100% of the prin cipal amount to be redeemed, plus accrued but unpaid interest to the date fixed for redemption, without premium.
Mandatory Sinking Fund Redemption. The 2022A Bonds maturing August 1, 20__ and August 1, __ (the “2022A Term Bonds”) shall also be subject to mandatory redemption in whole, or in part by lot, on August 1 in each year, commencing August 1, 20__ and August 1, 20__, respectively, as set forth below, from sinking fund payments made by the Successor Agency to the Principal Account, at a redemption price equal to the principal amount thereof to be redeemed, without premium, in the aggregate respective principal amounts and on August 1 in the respective years as set forth in the following tables; provided however, that (y) in lieu of redemption thereof such 2022A Term Bonds may be purchased by the Successor Agency, and (z) if some but not all of such 2022A Term Bonds have been optionally redeemed as described above, the total amount of all future sinking fund payments shall be reduced by the aggregate p rincipal amount of such 2022A Term Bonds so redeemed, to be allocated among such sinking fund payments in integral multiples of $5,000 as determined by the Successor Agency (notice of which determination shall be given by the Successor Agency to the Trustee and shall include a revised sinking fund schedule).
2022A Term Bonds of 20__
August 1 Principal Amount
2022A Term Bonds of 20__
August 1 Principal Amount
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A-4
The 2022B Bonds maturing August 1, 20__ and August 1, __ (the “2022B Term Bonds”) shall also be subject to mandatory redemption in whole, or in part by lot, on August 1 in each year, commencing August 1, 20__ and August 1, 20__, respectively, as set forth below, from sinking fund payments made by the Successor Agency to the Principal Account, at a redemption price equal to the principal amount thereof to be redeemed, without premium, in the aggregate respective principal amounts and on August 1 in the respective years as set forth in the following tables; provided however, that (y) in lieu of redemption thereof such 2022B Term Bonds may be purchased by the Successor Agency , and (z) if some but not all of such 2022B Term Bonds have been optionally redeemed as described above , the total amount of all future sinking fund payments shall be reduced by the aggregate principal amount of such 2022B Term Bonds so redeemed, to be allocated among such sinking fund payments in integral multiples of $5,000 as determined by the Successor Agency (notice of which determination shall be given by the Successor Agency to the Trustee and shall include a revised sinking fund schedule).
2022B Term Bonds of 20__
August 1 Principal Amount
2022B Term Bonds of 20__
August 1 Principal Amount
239
B-1
EXHIBIT B
FORM OF DISCLOSURE COUNSEL LETTER
[To come from Stradling]
240
C-1
EXHIBIT C
FORM OF ISSUE PRICE CERTIFICATE
$[PARA]
SUCCESSOR AGENCY TO THE
HERCULES REDEVELOPMENT AGENCY
TAX ALLOCATION REFUNDING BONDS, SERIES 2022A
FORM OF ISSUE PRICE CERTIFICATE
The undersigned, Stifel, Nicolaus & Company, Incorporated (“Stifel”), hereby certifies as set forth below with respect to the sale and issuance of the above-captioned obligations (the “Bonds”).
1. Bond Purchase Agreement. On [Pricing Date] (the “Sale Date”), Stifel and the Issuer executed a Bond Purchase Agreement (the “Purchase Agreement”) in connection with the sale of the Bonds. Stifel has not modified the Purchase Agreement since its execution on the Sale Date.
2. Price.
(a) As of the date of this Certificate, for each [Maturity] [[of the General Rule Maturities] of the Bonds, the first price at which at least 10% of each such Maturity of the Bonds was sold to the Public (the “10% Test”) was the respective price for such Maturity listed in Schedule A attached hereto.
(b) [Stifel offered the Hold -the-Offering-Price Maturities to the Public for purchase at the respective initial offering prices listed in Schedule A (the “Initial Offering Prices”) on or before the Sale Date. A copy of the pricing wire or equivalent communication for the Bonds is attached to this certificate as Schedule B.
(c) As set forth in the Bond Purchase Agreement, Stifel has agreed in writing that, (i) for each Maturity of the Hold -the-Offering-Price Maturities, i t would neither offer nor sell any of the Bonds of such Maturity to any person at a price that is higher than the Initial Offering Price for such Maturity during the Holding Period for such Maturity (the “hold-the-offering- price rule”), and (ii) any selling group agreement shall contain the agreement of each dealer who is a member of the selling group, and any retail distribution agreement shall contain the agreement of each broker -dealer who is a party to the retail distribution agreement, to comply with the hold-the-offering-price rule. Pursuant to such agreement, no Underwriter (as defined below) has offered or sold any Maturity of the Hold -the-Offering-Price Maturities at a price that is higher than the respective Initial Offering Price for that Maturity of the Bonds during the Holding Period.]
(d) [** With respect to each of the General Rule Maturities of the Bonds:
(1) As of the date of this Certificate, Stifel has not sold at least 10% of the Bonds of these Maturities at any single price.
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C-2
(2) As of the date o f this Certificate, Stifel reasonably expects that the first sale to the Public of Bonds of these Maturities will be at or below the respective price or prices listed on the attached Schedule A as the “Reasonably Expected Sale Prices for Undersold Maturities.”
(3) Stifel will provide actual sales information (substantially similar to the information contained on Schedule B) as to the price at which the first 10% of each such Maturity (i.e., the Undersold Maturity or Maturities) is sold to the Public. (4) On the date the 10% Test is satisfied with respect to all Maturities of the Bonds, Stifel will execute a supplemental certificate substantially in the form attached hereto as Schedule C with respect to any remaining Maturities for which the 10% Test has not been satisfied as of the Closing Date.**]
2. Defined Terms.
(a) “General Rule Maturities” means those Maturities of the Bonds listed in Schedule A hereto as the “General Rule Maturities.”
(b) “Hold-the-Offering-Price Maturities” means those Maturities of the Bonds listed in Schedule A hereto as the “Hold-the-Offering-Price Maturities.” (c) “Holding Period” means, with respect to a Hold -the-Offering-Price Maturity, the period starting on the Sale Date and ending on the earlier of (i) the close of the fifth business day after the Sale Date, or (ii) the date on which Stifel has sold at least 10% of such Hold -the- Offering-Price Maturity to the Public at prices that are no higher than the Initial Offering Price for such Hold-the-Offering-Price Maturity.
(d) “Issuer” means the Successor Agency to the Hercules Redevelopment Agency. (e) “Maturity” means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate Maturities.
(f) “Public” means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter.
The term “related party” for purposes of this certificate gener ally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly. (g) “Underwriter” means (i) any person that agrees pursuant to a written contract with the Issuer (or with the lead Underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public).
3. Arbitrage Yield. We have calculated the arbitrage yield with respect to the Bonds to be 2.6381% in accordance with the following instructions provided by Bond Counsel; such calculation is 242
C-3
attached in Schedule B. Bond Counsel has advised that yield on the Bonds is the discount rate that, when used in computing the present value as of the issue date of all unconditionally payable payments of principal and interest on the Bonds, produces an amount equal to the present value, using the same discount rate, of the aggregate issue price of bonds of the issue as of the issue date. Bond Counsel has advised that the issue price is determined based on the prices of each maturity of the Bonds listed in Schedule A. To the extent that we provided the Issuer and Bond Counsel with certain computations that show a bond yield, issue price, weighted average maturity and certain other information with respect to the Bonds, these computations are based on our understanding of directions that we have received from Bond Counsel regarding interpretation of the applicable law. We express no view regarding the legal sufficiency of any such computations or the correctness of any legal interpretation made by Bond Counsel.
4. [Credit Enhancement.
(a) The present value of the amount paid to obtain the Credit Enhancement (as defined in the Tax Certificate) is less than the present value of the interest reasonably expected to be saved as a result of having the Credit Enhancement, using the yield with respect to the Bonds as the discount factor for this purpose.
(b) To the best knowledge of the undersigned, the amount pai d by the Issuer to the Insurer (as defined in the Tax Certificate) for the Credit Enhancement is within a reasonable range of premiums charged for comparable credit enhancement for obligations comparable to the Bonds.]
5. The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents Stifel’s interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder.
The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Tax Certificate of the Issuer dated [Closing Date] and with respect to compliance with the federal income tax rules affecting the Bonds, and by Bond Counsel, in connection with rendering its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of the Internal Revenue Service Form 8038-G, and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds.
STIFEL, NICOLAUS & COMPANY,
INCORPORATED
By:
Managing Director
By:
Director
Dated: [Closing Date]
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C-4
SCHEDULE A
TO
ISSUE PRICE CERTIFICATE
[Schedules to be updated at pricing in the event there are Hold-the-Offering-Price-Maturities]
Actual Sales Information as of Closing Date
Maturity/CUSIP Coupon Date Sold Time Sold Par Amount Sale Price
[**Reasonably Expected Sales Prices for Undersold Maturities as of Closing Date
Maturity/CUSIP Coupon Par Amount Offering Prices
**]
244
C-5
[**SCHEDULE B
TO
ISSUE PRICE CERTIFICATE
Actual Sales for Undersold Maturities as of the Closing Date
Maturity/CUSIP Date Sold Time Sold Par Amount Sale Price
**]
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C-6
[**SCHEDULE C
TO
ISSUE PRICE CERTIFICATE
SUPPLEMENTAL ISSUE PRICE CERTIFICATE OF UNDERWRITER
$[PARA]
SUCCESSOR AGENCY TO THE
HERCULES REDEVELOPMENT AGENCY
TAX ALLOCATION REFUNDING BONDS, SERIES 2022A
The undersigned, Stifel, Nicolaus & Company, Incorporated (“Stifel”), hereby certifies as set forth below with respect to the sale and issuance of the above-captioned obligations (the “Bonds”).
1. Issue Price.
(a) Stifel sold at least 10% of the _______ Maturities of the Bonds to the Public at the price or prices shown on the Issue Price Certificate dated as of the Closing Date (the “10% Test”).
With respect to each of the ______ Maturities of the Bonds, Stifel had not satisfied the 10% Test as of the Closing Date (the “Undersold Maturities”). (b) As of the date of this Supplemental Certificate, Stifel has satisfied the 10% Test with respect to the Undersold Maturities. The first price or prices at which at least 10% of each such Undersold Maturity was sold to the Public are the respective prices listed on Exhibit A attached hereto.
2. Defined Terms.
(a) “Issuer” means the Successor Agency to the Hercules Redevelopment Agency. (b) “Maturity” means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate Maturities.
(c) “Public” means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter.
The term “related party” for purposes of this certif icate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly. (d) “Underwriter” means (1) any person that agrees pursuant to a written contract with the Issuer (or with the lead Underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (2) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (1) of this paragraph to participate in the initia l sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public).
3. The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents Stifel’s interpretation of any laws, including specifically Sections 103 and 246
C-7
148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder.
The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Tax Certificate of the Issuer dated [Closing Date] and with respect to compliance with the federal income tax rules affecting the Bonds, and by Bond Counsel, in connection with rendering its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of the Internal Revenue Service Form 8038-G, and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds.
STIFEL, NICOLAUS & COMPANY,
INCORPORATED
By:
[Title]
By:
[Title]
Dated:
247
1 4860-3577-2162v4/200861-0005
CONTINUING DISCLOSURE CERTIFICATE
This CONTINUING DISCLOSURE CERTIFICATE (this “Disclosure Certificate”) is executed and delivered by the Successor Agency to the Hercules Redevelopment Agency (the “Successor Agency”) in connection with the execution and delivery of the Successor Agency to the Hercules Redevelopment Agency Tax Allocation Refunding Bonds, Series 2022A, issued in the initial aggregate principal amount of $____ ______, and the Successor Agency to the Hercules Redevelopment Agency Tax Allocation Refunding Bonds, Series 2022B (Federally Taxable), issued in the initial aggregate principal amount of $__________, (collectively, the “Bonds”). The Bonds are being executed and delivered pursuant to an Indenture of Trust, dated as of _____ 1, 2022, by and between the Successor Agency and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Indenture”).
The Successor Agency covenants and agrees as follows:
Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the Successor Agency for the benefit of the holders and beneficial owners of the Bonds and in order to assist the Participating Underwriter in complying with the Rule.
Section 2. Definitions. In addition to the definitions set forth above and in the Indenture, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section 2, the following capitalized terms shall have the following meanings:
“Annual Report” means any Annual Report provided by the Successor Agency pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. “Annual Report Date” means each March 31, commencing March 31, 20__, or the date that is nine months after the end of the Successor Agency’s fiscal year if the Successor Agency’s fiscal year is changed (the Successor Agency’s fiscal year currently ends June 30). “Dissemination Agent ” means Urban Futures, Inc. , or any successor Dissemination Agent designated in writing by the Successor Agency and which has filed with the Successor Agency a written acceptance of such designation.
“Listed Events” means any of the events listed in Section 5(a) of this Disclosure Certificate. “MSRB” means the Municipal Securities Rulemaking Board, which has been designated by the Securities and Exchange Commission as the sole repository of disclosure information for purposes of the Rule, or any other repository of disclosure informa tion that may be designated by the Securities and Exchange Commission as such for purposes of the Rule in the future. “Official Statement” means the final official statement executed by the Successor Agency in connection with the issuance of the Bonds.
“Participating Underwriter” means Stifel, Nicolaus & Company, Incorporated, the original underwriter of the Bonds required to comply with the Rule in connection with offering of the Bonds. “Rule” means Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as it may be amended from time to time. 248
2 4860-3577-2162v4/200861-0005
Section 3. Provision of Annual Reports.
(a) The Successor Agency shall, or shall cause the Dissemination Agent to, not later than the Annual Report Date, commencing March 31, 20__ with the report for the _____ fiscal year, provide to the MSRB, in an electronic format as prescribed by the MSRB, an Annual Report that is consistent with the requirements of Section 4 of this Disclosure Certificate. Not later than 15 Business Days prior to the Annual Report Date, the Successor Agency shall provide the Annual Report to the Dissemination Agent (if other than the Successor Agency). If by 15 Business Days prior to the Annual Report Date the Dissemination Agent (if other than the Successor Agency) has not received a cop y of the Annual Report, the Dissemination Agent shall contact the Successor Agency to determine if the Successor Agency is in compliance with the previous sentence. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may include by reference other information as provided in Section 4 of this Disclosure Certificate; provided that the audited financial statements of the Successor Agency may be submitted separately from the balance of the Annual Report, and later than the Annual Report Date, if not available by that date. If the Successor Agency’s fiscal year changes, it shall give notice of such change in the same manner as for a Listed Event under Section 5(b). The Successor Agency shall provide a writt en certification with each Annual Report furnished to the Dissemination Agent to the effect that such Annual Report constitutes the Annual Report required to be furnished by the Successor Agency hereunder. (b) If the Successor Agency does not provide (or cause the Dissemination Agent to provide) an Annual Report by the Annual Report Date, the Successor Agency shall provide (or cause the Dissemination Agent to provide) to the MSRB, in a timely manner and in an el ectronic format as prescribed by the MSRB, a notice in substantially the form attached as Exhibit A. (c) With respect to each Annual Report, the Dissemination Agent shall:
(i) determine each year prior to the Annual Report Date the then -applicable rules and electronic format prescribed by the MSRB for the filing of annual continuing disclosure reports; and
(ii) if the Dissemination Agent is other than the Successor Agency, file a report with the Successor Agency certifying that the Annual Report has been provided pursuant to this Disclosure Certificate, and stating the date it was provided.
Section 4. Content of Annual Reports . The Annual Report shall contain or incorporate by reference the following:
(a) The Successor Agency’s audited financial stateme nts prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board. If the Successor Agency’s audited financial statements are not avai lable by the Annual Report Date, the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the final Official Statement, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available.
(b) Unless otherwise provided in the audited financial statements filed on or before the Annual Report Date, financial information and operating data with respect to the Successor Agency 249
3 4860-3577-2162v4/200861-0005
for the preceding fiscal year, substantially similar to that provided in the corresponding tables in the Official Statement:
(i) Description of issuance by the Successor Agency of any debt payable from or secured by a pledge of Pledged Tax Revenues in the Project Area (as defined in the Official Statement) in the most recently completed fiscal year only (including details as to date, amount, term, rating, insurance).
(ii) The assessed value of property in the Project Area for the current fiscal year only in the form of Table __ in the Official Statement. (iii) The ten largest property taxpayers in the Project Area for the current fiscal year only in the form of Table __ to the Official Statement. (iv) The land use statistics of the Project Area for the current fiscal year only in the form of Table __ to the Official Statement.
(v) The coverage ratio provided by Pledged Tax Revenues in the Project Area with respect to debt service on the Bonds and any Parity Debt for the current fiscal year only, in the form of Table __ in the Official Statement without any requirement to update any projected Pledged Tax Revenues set forth in Table __.
(vi) [If the County has rescinded the Teeter Plan with respect to the Successor Agency’s Pledged Tax Revenues, a statement to that effect.] (vii) [The outstanding amounts due under each of the Prior Agreements.] (c) Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the Successor Agency or related public entities, which are available to the public on the MSRB’s Internet web site or filed with the Securities and Exchange Commission. The Successor Agency shall clearly identify each such other document so included by reference.
Section 5. Reporting of Significant Events.
(a) The Successor Agency shall give, or cause to be given, notice of the occurrence of any of the following Listed Events with respect to the Bonds:
(1) Principal and interest payment delinquencies.
(2) Non-payment related defaults, if material.
(3) Unscheduled draws on debt service reserves reflecting financial difficulties. (4) Unscheduled draws on credit enhancements reflecting financial difficulties. (5) Substitution of credit or liquidity providers, or their failure to perform. (6) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 250
4 4860-3577-2162v4/200861-0005
5701-TEB) or other material notices or determinations with respect to the tax status of the security, or other material events affecting the tax status of the security.
(7) Modifications to rights of security holders, if material. (8) Bond calls, if material, and tender offers.
(9) Defeasances.
(10) Release, substitution, or sale of property securing repayment of the securities, if material.
(11) Rating changes.
(12) Bankruptcy, insolvency, receivership or similar event of the Successor Agency. (13) The consummation of a merger, consolidation, or acquisition involving the Successor Agency, or the sale of a ll or substantially all of the assets of the Successor Agency (other than in the ordinary course of business), the entry into a definitive agreement to undertake such an action, or the termination of a definitive agreement relating to any such actions, oth er than pursuant to its terms, if material.
(14) Appointment of a successor or additional trustee or the change of name of a trustee, if material.
(15) Incurrence of a financial obligation of the Successor Agency, if material, or agreement to covenants, ev ents of default, remedies, priority rights, or other similar terms of a financial obligation of the Successor Agency, any of which affect Bond holders, if material.
(16) Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a financial obligation of the Successor Agency, any of which reflect financial difficulties.
(b) Whenever the Successor Agency obtains knowledge of the occurrence of a Listed Event, the Successor Agency shall, or shall cau se the Dissemination Agent (if not the Successor Agency) to, file a notice of such occurrence with the MSRB, in an electronic format as prescribed by the MSRB, in a timely manner not in excess of 10 business days after the occurrence of the Listed Event.
(c) The Successor Agency acknowledges that the events described in subparagraphs (a)(2), (a)(7), (a)(8) (if the event is a bond call), (a)(10), (a)(13), (a)(14), and (a)15 of this Section 5 contain the qualifier “if material” and that subparagraph (a)(6) also contains the qualifier “material” with respect to certain notices, determinations or other events affecting the tax status of the Bonds. The Successor Agency shall cause a notice to be filed as set forth in paragraph (b) above with respect to any such event only to the extent that it determines the event’s occurrence is material for purposes of U.S. federal securities law. Whenever the Successor Agency obtains knowledge of the occurrence of any of these Listed Events, the Successor Agency will as soo n as possible determine if such event 251
5 4860-3577-2162v4/200861-0005
would be material under applicable federal securities law. If such event is determined to be material, the Successor Agency will cause a notice to be filed as set forth in paragraph (b) above. (d) For purposes of this Disclosure Certificate, any event described in paragraph (a)(12) above is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent, or similar officer for the Successor Agency in a proceeding under the United States Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the Successor Agency, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement, or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the Successor Agency.
(e) For purposes of the events identified in paragraphs (a)(15) and (a)(16) above, the term “financial obligation” means a (i) debt obligation; (ii) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (iii) guarantee of (i) or (ii). The term financial obligation shall not include municipal securities as to which a final official statement has been provided to the MSRB consistent with the Rule.
Section 6. Identifying Information for Filings with the MSRB. All documents provided to the MSRB under the Disclosure Certificate shall be accompanied by identifying information as prescribed by the MSRB.
Section 7. Termination of Reporting Obligation. The Successor Agency’s obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or p ayment in full of all of the Bonds. If such termination occurs prior to the final maturity of the Bonds, the Successor Agency shall give notice of such termination in the same manner as for a Listed Event under Section 5(b).
Section 8. Dissemination Agent. The Successor Agency may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any Dissemination Agent, with or without appointing a successor Dissemination Agent. The initial Dissemination Agent shall be Urban Futures, Inc. Any Dissemination Agent may resign by providing 30 days’ written notice to the Successor Agency.
Section 9. Amendment; Waiver . Notwithstanding any other provision of this Disclo sure Certificate, the Successor Agency may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied:
(a) if the amendment or waiver relates to the provisions of Sections 3(a), 4 or 5(a), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature, or status of an obligated person with respect to the Bonds, or type of business conducted;
(b) the undertakings herein, as proposed to be amended or waived, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the primary offering of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and
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6 4860-3577-2162v4/200861-0005
(c) the proposed amendment or waiver either (i) is approved by holders of the Bonds in the manner provided in the Indenture for amendments to the Indenture with the consent of holders, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the holders or beneficial owners of the Bonds.
If the annual financial information or operating data to be provided in the Annual Report is amended pursuant to the provisions hereof, the first Annual Report filed pursuant hereto containing the amended operating data or financial information shall explain, in narrative form, the reasons for the amendment and the impact of the change in the type of operating data or financial information being provided.
If an amendment is made to this Disclosure Certificate modifying the accounting principles to be followed in preparing financial statements, the Annual Report for the year in which the change is made shall present a comparison between the financial statements or information prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles.
The comparison shall include a qualitative discussion of the differences in the accounting principles and the impact of the change in the accounting principles on the presentation of the financial information, in order to provide information to investors to enable them to eva luate the ability of the Successor Agency to meet its obligations. To the extent reasonably feasible, the comparison shall be quantitative.
A notice of any amendment made pursuant to this Section 9 shall be filed in the same manner as for a Listed Event under Section 5(b).
Section 10. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the Successor Agency from disseminating any other information, using the means of dissemination set forth in this Disclosure Certifica te or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the Successor Agency chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the Successor Agency shall have no obligation under this Disclosure Certificate to update such in formation or include it in any future Annual Report or notice of occurrence of a Listed Event.
Section 11. Default. If the Successor Agency fails to comply with any provision of this Disclosure Certificate, the Participating Underwriter or any holder or beneficial owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Successor Agency to comply with its obligations under this Disclosure Certificate. A de fault under this Disclosure Certificate shall not be deemed an Event of Default under the Indenture, and the sole remedy under this Disclosure Certificate in the event of any failure of the Successor Agency to comply with this Disclosure Certificate shall be an action to compel performance.
Section 12. Duties, Immunities and Liabilities of Dissemination Agent. (a) The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the Successor Agency agree s to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which they may incur arising out of or in the exercise or performance of its powers and duties 253
7 4860-3577-2162v4/200861-0005
hereunder, including the costs and expenses (including attorneys fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s negligence or willful misconduct.
The Dissemination Agent shall have no duty or obligation to review any information provided to it by the Successor Agency hereunder, and shall not be deemed to be acting in any fiduciary capacity for the Successor Agency, the Bond holders or any other party. The obligations of the Successor Agency under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds.
(b) The Dissemination Agent shall be paid compensation by the Successor Agency for its services provided hereunder in accordance with its schedule of fees as amended from time to time, and shall be reimbursed for all expenses, legal fees and advances made or incurred by the Dissemination Agent in the performance of its duties hereunder.
Section 13. Beneficiaries. This Disclosure Certificate shall inure solely to t he benefit of the Successor Agency, the Dissemination Agent, the Participating Underwriter and the holders and beneficial owners from time to time of the Bonds, and shall create no rights in any other person or entity.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
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8 4860-3577-2162v4/200861-0005
Section 14. Counterparts. This Disclosure Certificate may be executed in several counterparts, each of which shall be regarded as an original, and all of which shall constitute one and the same instrument.
Dated: ____, 2022 SUCCESSOR AGENCY TO THE HERUCLES
REDEVELOPMENT AGENCY
By:
Executive Director
AGREED AND ACCEPTED:
URBAN FUTURES, INC.,
as Dissemination Agent
By:
Authorized Representative
255
9 4860-3577-2162v4/200861-0005
EXHIBIT A
NOTICE OF FAILURE TO FILE ANNUAL REPORT
Name of Issuer: Successor Agency to the Hercules Redevelopment Agency Name of Issue: Successor Agency to the Hercules Redevelopment Agency Tax Allocation Refunding Bonds, Series 2022A
Successor Agency to the Hercules Redevelopment Agency
Tax Allocation Refunding Bonds, Series 2022B (Federally Taxable) Date of Issuance: _____, 2022
NOTICE IS HEREBY GIVEN that the Successor Agency has not provided an Annual Report with respect to the above -named Bonds as required by the Indenture of Trust, dated as of _____ 1, 2022, by and between the Successor Agency and The Bank of New York Mellon Trust Company, N.A., as trustee. The Successor Agency anticipates that the Annual Report will be filed by ________________.
Dated: __________
DISSEMINATION AGENT:
URBAN FUTURES, INC.
By:
Its:
256
STAFF REPORT TO THE CITY COUNCIL
DATE: Regular Meeting of January 11, 2022
TO: Members of the City Council
SUBMITTED BY: Dante Hall, City Manager
SUBJECT: ARPA – Results of the Business and Community Surveys and Funding Principals
Recommendation
Accept the proposed set of principles to assist in developing the plan for use of the ARPA funds.
Fiscal Impact
None. Everything to be funded through the ARPA funds.
Executive Summary
The United States Department of Treasury released American Rescue Plan Act (ARPA) regulations and updated local government allocations on May 10, 2021. As part of the $1.9 trillion relief package, the City’s allocation is set at $6,285,778. Staff and our consultant will provide an ARPA update and the results of our business and community survey.
Over the past few months, the City Council has provided several ideas for ways to best utilize ARPA funds (Attachment 3). At the Special Council Meeting scheduled for February 22, 2022, regarding the annual budget, the City Council will be presented with a preliminary plan for the use of the ARPA funds including recommendations from staff and suggestions from Councilmembers. To assist in developing that plan, tonight staff seeks Council’s acceptance of a set of principles to be considered when making a final decision about projects to be funded with ARPA money.
Background
At the September 28th City Council meeting, HdL Companies’ Senior Advisor, Sandra Meyer, gave an overview of the agenda staff report, providing an introduction to the American Rescue Plan Act (ARPA) and presented a draft business needs survey, which is used to better understand the impact of the COVID-19 Pandemic on Hercules businesses. Staff also prepared a Community Needs Survey to assess the impact on community members. Both were launched on October 20, 2020 and concluded on November 26, 2020. The Business Needs Survey was distributed in 3 ways, including:
Social Media Outlets
257
City Website
Emails to active business license holders
The Community Needs Survey was posted on Social Media Outlets and the City’s Website.
Business Needs Survey Results
The Business Needs Survey garnered 39 responses from businesses located in Hercules. Details of the survey responses are attached (Attachment 1). Below is a summary of the results.
29 of the 37 responding businesses were either self-employed or had just 1 to 4 employees. Restaurants/eating and drinking establishments had the highest number of respondents at 15%
Medical Offices (Dental, Physicians, Pharmacies) and Professional and Technical Services were the next highest respondents each at 13%
77 % of the businesses that responded reported that their business operation has been negatively impacted by the COVID-19 Pandemic, with the biggest impacts being: 1) loss of revenue, 2) reduced customer demand and 3) temporary closure 37% of the respondents did not receive any financial assistance 40% of the respondents received financial assistance from the Paycheck Protection Program 24% received financial assistance from the Economic Injury Disaster Loan/Advance (EIDL) 24% received financial assistance from the California Small Business COVID-19 Relief Grant
Ranking of the greatest challenges for the business/organization's recovery included: 1) paying rent (including back rent accumulated), 2) re-establishing customer base, 3) two-way tie between cash flow & payroll and marketing their business 4) hiring or rehiring employees 5) two-way tie between obtaining inventory and supplies and securing future financing 6) debt management
The ranking of desired assistance by the City of the 39 business that responded included: 1) assistance with applying for available COVID-19 relief grants 2) rent assistance grants, 3) shop local campaign, including a community gift card program partially subsidized by the City and assistance with applying for small business relief grants, 4) two-way tie between financial training and resources - access to capital, debt management, etc and small business resources & one-on-one counseling assistance 5) online business support – website assistance 6) employee training and hiring assistance 7) a two way tie between improvements/enhancements to commercial areas and continued outdoor dining operations with enhancements
Of those that responded to suggesting improvements or enhancements to the City’s commercial areas, the three top suggestions were additional arts, culture and entertainment venues, increased police presence and additional lighting, such as decorative strings of lights
Community Survey Responses
136 responses were received from the Community Survey. Details of the survey responses are attached (Attachment 2).
In summary:
A majority of the respondents live in Hercules (130)
258
136 survey responders ranked importance of 9 different community aspects. Each aspect is not necessarily eligible for ARPA funding. The results are listed in descending order of weighted average:
o improve public infrastructure (roads, sidewalks, storm drains, etc.) o police and fire services
o city having the resources to continue to provide high quality services o recreation, parks, trails, creeks and open spaces
o support and recovery of local businesses
o assist residents that need housing, food, healthcare, childcare, rent or utility help o traffic/bike/pedestrian safety
o affordable housing options
o support the work of non-profit organizations in the community 72% of the respondents would participate in a Community E‐Gift Card Program designed to promote Hercules businesses and encourage shopping, dining, and services in Hercules.
Lafayette. 38% would not.
101 respondents have eaten at the temporary outdoor dining spaces in Hercules. 72% of respondents would you like to see the outdoor dining spaces enhanced or enlarged with more permanent and aesthetic structures. 29% said to keep the outdoor dining spaces as they are.
Use of Fiscal Recovery Funds for General Fund Revenue Loss Incurred by the City The City of Hercules received an ARPA funding allocation of $6,285,778. The first payment equal to one half of the City of Hercules’ allocation in the amount of $3,142,889 was received by the City in mid-July 2021. The second half will be distributed in July 2022. ARPA recipients may use payments from the Fiscal Recovery Funds for the provision of government services to the extent of the reduction in revenue experienced due to the COVID‐19 public health emergency. Section 603(c)(1)(C) of the ARPA allows recipients facing budget shortfalls to use payments from the Fiscal Recovery Funds to avoid cuts to government services. This is envisioned to enable local governments to continue to provide valuable services and ensure that budget deficits, tax increases and reductions in public expenditures do not continue to delay a city’s broader economic recovery.
Based on the Department of the Treasury’s revenue loss formula which includes all sources of revenue, the City of Hercules experienced a $2,918,338 shortfall in general revenues for the period ending December 31, 2020 due to the COVID–19 public health emergency. This total amount, or any portion thereof, is an eligible expense under ARPA funding rules.
Use of ARPA Funds for other than General Fund Revenue Loss The American Rescue Plan Act provides that Fiscal Recovery Funds may also be used for the following:
To respond to the public health emergency or its negative economic impacts, including assistance to households, small businesses, and nonprofits, or aid to impacted industries such as tourism, travel, and hospitality;
To respond to workers performing essential work during the COVID‐19 public health emergency by providing premium pay to eligible workers; To make necessary investments in water, sewer, or broadband infrastructure.
259
The Interim Final Rule implements the provisions of ARPA and identifies a non‐exclusive list of programs or services that may be funded as responding to COVID‐19 or the negative economic impacts of the COVID‐19 public health emergency, along with considerations for evaluating other potential uses of the Fiscal Recovery Funds not explicitly listed. In determining whether a program or service responds to the negative economic impacts of the COVID‐19 public health emergency, the Interim Final Rule provides that payments from the Fiscal Recovery Funds should be designed to address an economic harm resulting from or exacerbated by the public health emergency.
Cities are encouraged to use payments from the Fiscal Recovery Funds to respond to the direct and immediate needs of the pandemic and its negative economic impacts and, in particular, the needs of households and businesses that were disproportionately and negatively impacted by the public health emergency. Please note that the use of ARPA funds is subject to compliance and reporting requirements to the US Treasury along with possible audits.
Next Steps
Feedback from the Community and Business Recovery Surveys are one important factor for the City Council to consider when developing the ARPA funding plan. The City Council also provided ideas for use of the funds at their September 28th meeting as listed in Attachment 3. At the public meeting scheduled for February 22, 2022, the City Council will be presented with a preliminary plan for use of the ARPA funds. Staff has developed a draft set of principals for the City Council to consider and approve to assist in developing the plan for use of the funds as follows:
The ARPA funds do not need to be allocated until December 31, 2024 and the funds do not need to be spent until December 31, 2026.
The ARPA funds are a one‐time source of monies so ongoing costs need to be considered before allocating funds for any projects or programs.
The City should use other dedicated grants and funding programs first, whenever possible, and save ARPA funds for priorities not eligible for other federal and state assistance programs (such as federal infrastructure bills)
With the first three bullet points in mind, ARPA funds will be allocated in the following order of priority:
o To ensure that the City will have the resources to continue to provide high quality services by replacing the City’s general revenue losses o To support the economic recovery of households and small businesses o To solve immediate specific problems raised by the pandemic for the City o To make investments that will strengthen and hasten the economic recovery of the City and its businesses
It is important to note that the U.S. Senate just recently passed the “State, Local, Tribal, and Territorial Fiscal Recovery, Infrastructure, and Disaster Relief Flexibility Act” – SB 3011, which has now moved on to the U.S. House of Representatives. HdL staff are reviewing and monitoring this new bill, which may allow more flexibility and less reporting requirements for allocating the funds. There is uncertainty if and when this might be approved by the House and the President and what exactly the passage of this bill would change. However, this new legislation might broaden the types of infrastructure programs for which ARPA will allow funding (proposed to include roads, sidewalks, bridges and more traditional infrastructure projects) and possibly provide a new way to 260
measure revenue loss. Consequently, it might be prudent to not allocate all of the first tranche of ARPA funding until the 3011 bill passes.
Attachments
1. Business Needs Survey
2. Community Survey
3. City Council ARPA Funding Suggestions
261
COVID-19 Business Recovery Survey
QUESTION SUMMARIES DATA TRENDS INDIVIDUAL RESPONSES
Q1 w
Q2 w
Q3 w
100.00% 39
94.87% 37
100.00% 39
97.44% 38
69.23% 27
92.31% 36
46.15% 18
Please provide your business or organization information:
Answered: 39 Skipped: 0
ANSWER CHOICES RESPONSES
Responses Business Name
Responses Business Street Address
Responses Business Zip Code
Responses Business Email
Responses Business Website
Responses Business Phone Number
Responses Social Media Account(s)
What year was your business/organization established in Hercules?
Answered: 38 Skipped: 1
2018
11/20/2021 12:50 AM
2004
11/18/2021 10:30 AM
1994
11/17/2021 2:38 PM
2005
11/17/2021 11:08 AM
How many employees do you currently have at your
Hercules location?
Answered: 39 Skipped: 0
39 responsesShare Link https://www.surveymonkey.com/results/SM-VX8WF2VC9/COPY Hide comments
÷ wSIGN UP FREE
262
Q4 w
35.90% 14
38.46% 15
10.26% 4
15.38% 6
0.00% 0
0.00% 0
0.00% 0
TOTAL 39
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Self-employed
with no...
1 to 4
5 to 9
10 to 25
26 to 50
51 to 100
101 or more
ANSWER CHOICES RESPONSES
Self-employed with no employees
1 to 4
5 to 9
10 to 25
26 to 50
51 to 100
101 or more
Please indicate your business type:
Answered: 39 Skipped: 0
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263
0.00% 0
5.13% 2
2.56% 1
2.56% 1
0.00% 0
0.00% 0
2.56% 1
0.00% 0
7.69% 3
0.00% 0
5.13% 2
12.82% 5
2.56% 1
12.82% 5
15.38% 6
2.56% 1
TOTAL 39
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Auto-Related
Beauty/Personal
Care Service...
Childcare,
Education,...
Construction
Entertainment
& Recreation
Finance,
Insurance, R...
Fitness
Center/Gym
Grocery Store
Home-based
Business
Hospitality &
Tourism
Distribution,
Light-Manufa...
Medical
Offices...
Non-Profit
Professional
and Technica...
Restaurant,
Bar, Brewpub...
Retail Store
Technology
(Research &...
Other (please
specify)
ANSWER CHOICES RESPONSES
Auto-Related
Beauty/Personal Care Services (Hair, Nail, Waxing, Tattoo) Childcare, Education, Tutoring
Construction
Entertainment & Recreation
Finance, Insurance, Real Estate
Fitness Center/Gym
Grocery Store
Home-based Business
Hospitality & Tourism
Distribution, Light-Manufacturing or Production
Medical Offices (Dental, Physicians, Pharmacies)
Non-Profit
Professional and Technical Services
Restaurant, Bar, Brewpubs, and Other Food/Drink
Retail Store
39 responsesShare Link https://www.surveymonkey.com/results/SM-VX8WF2VC9/COPY ÷ wSIGN UP FREE
264
Q5 w
Q6 w
2.56% 1
25.64% 10
TOTAL 39
ANSWER CHOICES RESPONSES
Technology (Research & Development, Software)
Responses Other (please specify)
76.92% 30
23.08% 9
Has your business/organization been negatively impacted by COVID-19?
Answered: 39 Skipped: 0
TOTAL 39
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Yes
No
ANSWER CHOICES RESPONSES
Yes
No
76.67% 23
50.00% 15
0.00% 0
13.33% 4
If yes, how was your business/organization negatively
impacted? (Select all that apply):
Answered: 30 Skipped: 9
Total Respondents: 30
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Loss of revenue
Temporary
closure
Permanent
closure
Layoff of one
or more staff
Reduced
customer
demand
ANSWER CHOICES RESPONSES
Loss of revenue
Temporary closure
Permanent closure
Layoff of one or more staff
39 responsesShare Link https://www.surveymonkey.com/results/SM-VX8WF2VC9/COPY ÷ wSIGN UP FREE
265
Q7 w
Q8 w
50.00% 15
Total Respondents: 30
ANSWER CHOICES RESPONSES
Reduced customer demand
36.84% 14
39.47% 15
23.68% 9
23.68% 9
10.53% 4
5.26% 2
0.00% 0
0.00% 0
2.63% 1
2.63% 1
What COVID-19 relief funding or assistance has your
business/organization received? (Select all that apply):
Answered: 38 Skipped: 1
Total Respondents: 38
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
I have not
received...
Paycheck
Protection...
Economic
Injury Disas...
California
Small Busine...
EDD
(Employment...
Tax or Permit
Relief...
Federal
Restaurant...
Federal
Shuttered Ve...
Small Business
Development...
Other Small
Business...
ANSWER CHOICES RESPONSES
I have not received COVID-19 relief assistance
Paycheck Protection Program (PPP)
Economic Injury Disaster Loan/Advance (EIDL)
California Small Business COVID-19 Relief Grant
EDD (Employment Development) - Unemployment or Pandemic Unemployment Assistance
Tax or Permit Relief (Extended deadlines, waiver of late fees, tax credits, etc.) Federal Restaurant Revitalization Fund
Federal Shuttered Venue Operators Grant
Small Business Development Center (SBDC) – free training or counseling Other Small Business Administration (SBA) loan (e.g., SBA Debt Relief, Express Bridge Loan)
How much total COVID-19 relief funding has your business received?
Answered: 24 Skipped: 15
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266
Q9 w
20.83% 5
16.67% 4
12.50% 3
16.67% 4
33.33% 8
TOTAL 24
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
$1 - $5,000
$5,001 -
$10,000
$10,001 -
$20,000
$20,001 -
$50,000
More than
$50,000
ANSWER CHOICES RESPONSES
$1 - $5,000
$5,001 - $10,000
$10,001 - $20,000
$20,001 - $50,000
More than $50,000
28.13% 9
18.75% 6
40.63% 13
25.00% 8
What will be the greatest challenges to your
business/organization recovery? (Select your top three
choices):
Answered: 32 Skipped: 7
Total Respondents: 32
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Cash flow -
paying for...
Debt
management
Paying rent
and utilitie...
Hiring or
re-hiring...
Marketing my
business
Re-establishing
customer/cli...
Obtaining
inventory an...
Securing
future...
ANSWER CHOICES RESPONSES
Cash flow - paying for inventory and pay payroll
Debt management
Paying rent and utilities (including back rent)
Hiring or re-hiring employees
39 responsesShare Link https://www.surveymonkey.com/results/SM-VX8WF2VC9/COPY ÷ wSIGN UP FREE
267
Q10 w
Q11 w
28.13% 9
37.50% 12
21.88% 7
21.88% 7
Total Respondents: 32
ANSWER CHOICES RESPONSES
Marketing my business
Re-establishing customer/client base
Obtaining inventory and supplies
Securing future financing
10.00% 3
90.00% 27
If you are a restaurant, have you used outdoor dining
during the Pandemic and would you like to continue or
enhance outdoor dining?
Answered: 30 Skipped: 9
TOTAL 30
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Yes
Not applicable
ANSWER CHOICES RESPONSES
Yes
Not applicable
What type of assistance would be helpful for your
business/organization now and in the future? (Select all that apply):
Answered: 30 Skipped: 9
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268
Q12 w
10.00% 3
23.33% 7
16.67% 5
20.00% 6
13.33% 4
20.00% 6
50.00% 15
46.67% 14
10.00% 3
23.33% 7
Total Respondents: 30
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Continued
outdoor dini...
Shop local
campaign,...
Online
business...
Financial
training and...
Employee
training and...
Small business
resources &...
Assistance
with applyin...
Rent
assistance...
Improvements/en
hancements t...
Other (please
specify)
ANSWER CHOICES RESPONSES
Continued outdoor dining operationswith enhancements
Shop local campaign, including a community gift card program partially subsidized by the City
Online business support – website assistance
Financial training and resources -access to capital, debt management, etc.
Employee training and hiring assistance
Small business resources & one-on-one counseling
Assistance with applying for available COVID-19 relief grants and loans Rent assistance grants
Improvements/enhancements to commercial areas (Continued on Question 12) Responses Other (please specify)
(Question 11 Continued) What type of assistance would be helpful for your business/organization now and in the
future? If you have selected
"Improvements/enhancements to commercial areas"
Please select all that apply:
Answered: 16 Skipped: 23
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269
Q13 w
43.75% 7
25.00% 4
18.75% 3
25.00% 4
31.25% 5
18.75% 3
0.00% 0
12.50% 2
Total Respondents: 16
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Additional
arts, cultur...
Additional
lighting, su...
A farmers
market
Enhanced
landscaping
Increased
police presence
Information
kiosks
Parklets
and/or benches
Food truck
events
ANSWER CHOICES RESPONSES
Additional arts, culture and entertainment venues
Additional lighting, such as decorative strings of lights A farmers market
Enhanced landscaping
Increased police presence
Information kiosks
Parklets and/or benches
Food truck events
20.59% 7
Is your business/organization online? Would you like
assistance in setting up your business online? (Select all that apply):
Answered: 34 Skipped: 5
Total Respondents: 34
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
No, my
business doe...
Yes, my
business has...
Yes, my
business has...
Yes, I would
like assista...
No, I would
not like...
ANSWER CHOICES RESPONSES
No, my business does not have its own website
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270
Q14 w
Q15 w
35.29% 12
14.71% 5
23.53% 8
23.53% 8
Total Respondents: 34
ANSWER CHOICES RESPONSES
Yes, my business has a website, but it does not offer online ordering or delivery Yes, my business has a website and customers can order onlinefor pickup and/or delivery
Yes, I would like assistance improving my business' online presence (e.g., via a grant program to support a local marketing company to get my business set- up online) No, I would not like assistance with my business' online presence
81.82% 27
6.06% 2
3.03% 1
9.09% 3
0.00% 0
Have you benefitted from protections under the Contra
Costa County commercial rent eviction moratorium? Is
your business/organization behind on rent? (Answers are confidential):
Answered: 33 Skipped: 6
TOTAL 33
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
No, I have
continued to...
Yes, I have
not been abl...
Yes, I have
not been abl...
Yes, I have
not been abl...
Yes, I have
not been abl...
ANSWER CHOICES RESPONSES
No, I have continued to pay full rent during the pandemic/I am currently caught up on rent
Yes, I have not been able to pay rent during some or all of the time and my back rent is between $1 and $10,000
Yes, I have not been able to pay rent during some or all of the time and my back rent is between $10,001 and $20,000
Yes, I have not been able to pay rent during some or all of the time and my back rent is between $20,001 and $50,000
Yes, I have not been able to pay rent during some or all of the time and my back rent is over $50,000
What is the best way to communicate with you? (Select all that apply):
Answered: 39 Skipped: 0
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271
Q16 w
92.31% 36
28.21% 11
28.21% 11
5.13% 2
2.56% 1
5.13% 2
5.13% 2
Total Respondents: 39
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Email
Telephone
Text Message
Social Media
Website
Traditional
Mail
Other (please
specify)
ANSWER CHOICES RESPONSES
Email
Telephone
Text Message
Social Media
Website
Traditional Mail
Responses Other (please specify)
69.44% 25
11.11% 4
5.56% 2
Please specify business owner race/ethnicity. (Optional Response):
Answered: 36 Skipped: 3
Total Respondents: 36
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Asian or
Pacific...
Black or
African...
Hispanic or
Latino
White
Native
American or...
Other
race/ethnici...
Decline to
State
ANSWER CHOICES RESPONSES
Asian or Pacific Islander
Black or African American
Hispanic or Latino
39 responsesShare Link https://www.surveymonkey.com/results/SM-VX8WF2VC9/COPY ÷ wSIGN UP FREE
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19.44% 7
0.00% 0
0.00% 0
2.78% 1
Total Respondents: 36
ANSWER CHOICES RESPONSES
White
Native American or Alaskan Native
Other race/ethnicity not listed here
Decline to State
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273
ARPA Community Survey
QUESTION SUMMARIES DATA TRENDS INDIVIDUAL RESPONSES
Q1 w
Q2 w
96.30% 130
10.37% 14
2.22% 3
1.48% 2
What is your connection to Hercules?
Answered: 135 Skipped: 1
Total Respondents: 135
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
I live in
Hercules
I work in
Hercules
I own
commercial /...
Other (please
specify)
ANSWER CHOICES RESPONSES
I live in Hercules
I work in Hercules
I own commercial / investment property in Hercules
Responses Other (please specify)
What aspects of the Hercules community are most
important to you? Please rank the list below with 1 being the most important and 9 the least.
Answered: 136 Skipped: 0
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274
Q3 w
12.31%
16 4.62%
6 4.62%
6 7.69%
10 4.62%
6 7.69%
10 12.31%
16 15.38%
20 30.77%
40 130
11.28%
15 12.03%
16 5.26%
7 6.77%
9 9.02%
12 9.02%
12 15.04%
20 22.56%
30 9.02%
12 133
14.50%
19 18.32%
24 9.92%
13 14.50%
19 9.92%
13 12.21%
16 7.63%
10 6.87%
9 6.11%
8 131
19.40%
26 17.91%
24 26.12%
35 9.70%
13 16.42%
22 2.99%
4 4.48%
6 2.24%
3 0.75%
1 134
22.22%
30 12.59%
17 14.81%
20 11.11%
15 8.89%
12 10.37%
14 6.67%
9 5.93%
8 7.41%
10 135
5.26%
7 16.54%
22 15.79%
21 20.30%
27 15.79%
21 12.03%
16 6.02%
8 4.51%
6 3.76%
5 133
12.88%
17 9.09%
12 10.61%
14 12.12%
16 15.15%
20 16.67%
22 10.61%
14 9.09%
12 3.79%
5 132
0.00%
0 0.00%
0 3.82%
5 3.82%
5 3.05%
4 14.50%
19 25.95%
34 24.43%
32 24.43%
32 131
3.73%
5 8.96%
12 9.70%
13 14.18%
19 16.42%
22 13.43%
18 11.19%
15 8.21%
11 14.18%
19 134
0 1 2 3 4 5 6 7 8 9 10
Affordable
housing options
Assist
residents th...
City having
the resource...
Improve public
infrastructu...
Police and
fire services
Recreation,
parks, trail...
Support and
recovery of...
Support the
work of...
Traffic / Bike
/ Pedestrian... 1 2 3 4 5 6 7 8 9 TOTAL SCORE
Affordable
housing
options
Assist
residents
that need
housing,
food,
healthcare,
childcare,
rent or utility
help
City having
the resources
to continue
to provide
high quality
services
Improve
public
infrastructure
(roads,
sidewalks,
storm drains,
etc.)
Police and
fire services
Recreation,
parks, trails,
creeks and
open spaces
Support and
recovery of
local
businesses
Support the
work of non-
profit
organizations
in the
community
Traffic / Bike
/ Pedestrian
safety
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275
Q4 w
Q5 w
100.00% 106
85.85% 91
69.81% 74
What specific uses would you recommend for Hercules’
ARPA funds?
Answered: 106 Skipped: 30
ANSWER CHOICES RESPONSES
Responses 1.
Responses 2.
Responses 3.
71.85% 97
28.15% 38
Would you participate in a Community E-Gift Card
Program designed to promote Hercules’ businesses and
encourage shopping, dining, and services in Hercules? For example, if you buy a $50 gift card, the City would
subsidize an additional $50 using ARPA funding for a total $100 gift card.
Answered: 135 Skipped: 1
TOTAL 135
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Yes
No
ANSWER CHOICES RESPONSES
Yes
No
A number of temporary outdoor dining spaces were added
to restaurants; have you dined in one of these outdoor
spaces?
Answered: 101 Skipped: 35
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Q6 w
53.47% 54
11.88% 12
34.65% 35
TOTAL 101
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Yes
Yes, Frequently
Yes, Sometimes
ANSWER CHOICES RESPONSES
Yes
Yes, Frequently
Yes, Sometimes
71.43% 95
28.57% 38
Would you like to see the outdoor dining spaces enhanced or enlarged with more permanent and aesthetic
structures?
Answered: 133 Skipped: 3
TOTAL 133
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Yes
No, keep the
outdoor dini...
ANSWER CHOICES RESPONSES
Yes
No, keep the outdoor dining spaces as they are
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277
ATTACHMENT 3
Suggestion from City Council Members
Eucalyptus Trees Removal/Replacement
Sidewalks at Willow Avenue (Transit Center)
Adequate Air Protection (HVAC) – All City Buildings
Removal of Trees at the Tennis Court
Sister City Program (Tushima) – To send seniors/students trip to Japan Business Assistance Program
Rent Assistance Program – Grant
Local Organization to provide food
Senior Assistance Program
Sidewalks, safe walkways
Enhance City Communication to residence (Public Information Office) Aquatic Center Fence Replacement
Resurface Indoor Basketball Courts
278
STAFF REPORT TO THE CITY COUNCIL
DATE: Regular Meeting of January 11, 2022
TO: Members of the City Council
VIA: Dante G. Hall, City Manager
SUBMITTED BY: Lori Martin, Administrative Services Director/City Clerk
SUBJECT: Commission Appointments to City Commissions and Regional Boards and Committees
RECOMMENDED ACTION:
Consider making appointments to Hercules Boards and Commissions for the start of new two (2) year terms and making an appointment to the Contra Costa County Mosquito and Vector Control Board.
FISCAL IMPACT OF RECOMMENDATION:
There is no fiscal impact associated with this item.
DISCUSSION:
The City’s Commissions (listed below) have seats with term expirations of December 31, 20 21.
The City conducted a recruitment for applicants to fill the seats with new terms beginning January 2022. The application deadline for applicants was November 1, 2021. The City Council held a Special Meeting to conduct interviews on January 4, 2022. Details of the expiring terms and applicants are provided below for consideration by the City Council.
Planning Commission – Two (2) terms ending December 2021.
The Planning Commission meets the first and third Mondays of every month at 7 p.m. The Commission is advisory to the Council and has statutory duties imposed by State law. Two (2) applications were received. Hector Rubio and Robert Schaufenbil are current Commissioners with expiring terms both of which have applied for re-appointment.
Applicants for the Planning Commission: Hector Rubio; Robert Schaufenbil.
Finance Commission – Two (2) terms ending December 2021.
The Finance Commission meets bi-monthly on the third Wednesday at 7 p.m. The Commission is advisory to the Council. Six (6) applications were received. The 2 current Commissioners with expiring terms are: Lori Risby and Lori Ann Tretasco.
Applicants for Finance Commission: Lori Risby; Damian Wong; Henry Wong; Rachel Messiah; Frank Grimsley; Dennis Esselsagoe.
Community & Library Services Commission – One (1) term ending December 2021 and, One (1) Student Commissioner with term ending December 31, 2021. 279
The Community and Library Services Commission meets on the second Monday of every month at 7:00 p.m. The Commission is advisory to the Council . One (1) application was received for the Commission and two (2) student applications were received. The Commissioners with expiring terms are Evangelia Ward-Jackson and Mikayla Lavitoria.
Applicants for the Community and Library Services Commission are: Mikayla Lavitoria (Student Commissioner applicant); Haley Solis (Student Commissioner applicant); and Evangelia Ward- Jackson.
Regional Committees:
Mosquito and Vector Control Board: There is one (1) Hercules representative vacancy on the Mosquito and Vector Control Board. To date one (1) application was received by Damian Wong.
ATTACHMENTS: None.
280
STAFF REPORT TO THE CITY COUNCIL
DATE: Regular Meeting of January 11, 2022
TO: Members of the City Council
VIA: Dante G. Hall, City Manager
SUBMITTED BY: Lori Martin, Administrative Services Director/City Clerk
SUBJECT: 2022 Council Appointments on Regional Committees and Council Subcommittees
RECOMMENDED ACTION:
Appointment of members of the City Council by the Mayor to both Regional Committees and Council Subcommittees.
COMMISSION/SUBCOMMITTEE ACTION AND RECOMMENDATION:
There was no commission or subcommittee review of this item.
FISCAL IMPACT OF RECOMMENDATION:
There is no fiscal impact associated with this item.
DISCUSSION:
In January of each year, the Mayor appoints members of the Council to both Regional Committees and Council Subcommittees for one year terms.
At the Council Meeting of December 14, 2021 the Mayor solicited interest and availability of Council Members to serve on these various bodies and requested each Council Member to make their requests or desired changes to appointments by email to the Mayor through the City Clerk prior to the January 11, 2022 regular meeting.
Mayor Bailey will take each request under consideration and make his selections tonight. The 2022 Regional Committees and Council Subcommittees will be updated to reflect the actions taken tonight.
ATTACHMENTS:
1. 2021 Regional Committee and City Subcommittee Listing 281
t:\city council\regional and subcommittee appointments\2021 cc appointed reps - approved 01.12.2021.docx
CITY COUNCIL REPRESENTATION ON REGIONAL COMMITTEES
AND CITY SUB-COMMITTEES
APPROVED – January 12, 2021
COMMITTEES
APPOINTED
COUNCIL
MEMBER
ALTERNATE
MEETING SCHEDULE
AND/OR LOCATION
REGIONAL COMMITTEES
ABAG
101 Eighth Street
Oakland, CA 94607
510-464-7900
www.abag.ca.gov
Walker-Griffin Grimsley Exec. Bd. Meets 3rd Thursday every other month 7:00 p.m. (Jan., Mar., May,
July, Sept. and Nov.) Attendance
Optional
Contra Costa Mayors Conference
http://www.ccmayors.org/
Kelley Bailey First Thursday/mo. – 6:30 p.m.
Location Rotates
Hercules/Pinole - Wastewater
Management
Romero/Grimsley Walker-Griffin 1st Thursday/mo. – 8:30 a.m.
Location alternates with City of Pinole
League of Cities-E. Bay Division Kelley Grimsley 4th Thurs./mo. – Bd. Mtg. - 6:30 p.m.
Location Rotates
Capital Corridor JPA Board (Liaison) Romero Walker-Griffin 3rd Wed/Feb., June, Sept. Nov. – 10:00 a.m., alternates SJ, Sacramento and Suisan
Water Emergency Transportation
Authority (WETA) Liaison
Grimsley Bailey 1st Thursday/mo. – 1:00 p.m., alternates between SF and Alameda
West County Integrated Waste Mgmt
JPA (WCCIWMA)
One Alvarado Square
San Pablo, CA 94806
510-215-3125
www.recyclemore.com
Romero Walker-Griffin 2nd Thursday/mo. - 7:00 p.m.
San Pablo City Hall – Council
Chambers- One Alvarado Sq., San Pablo
Form 806 required - $50 stipend
Form 700 required
WCCTAC
13831 San Pablo Avenue
San Pablo, CA 94806
510-215-3221
www.wcctac.org
Kelley Bailey Last Friday/mo. – 8:00 a.m.
El Cerrito City Hall
Form 700 Required
West Co. Mayors & Supervisors
Assoc.
Kelley Bailey 4th Thursday/mo. – 8:00 a.m.
The location rotates
WestCat
601 Walter Avenue
Pinole, CA 94564
www.westcat.org
Bailey/Kelley Grimsley 2nd Thursday/mo. – 6:00 p.m.
Pinole Council Chambers, Pear St.
Form 700 required
282
t:\city council\regional and subcommittee appointments\2021 cc appointed reps - approved 01.12.2021.docx
CITY COMMITTEES
COMMITTEES
APPOINTED
COUNCIL
MEMBER
ALTERNATE
MEETING SCHEDULE
AND/OR LOCATION
Agenda Setting Kelley Bailey Thursday prior to meeting 8:00 a.m.
Economic Development
Subcommittee
Bailey/
Grimsley
Romero As needed and at least quarterly (In-Active)
Education Subcommittee Bailey/W-Griffin Grimsley As needed and at least quarterly (In-Active) Public Safety/Traffic Kelley/Bailey Grimsley As needed and at least quarterly
CITY COMMISSIONS – COUNCIL LIAISONS
Planning Commission Bailey/Grimsley 1st and 3rd Mondays Community & Library Services
Commission
Romero/Bailey 2nd Monday
Finance Commission W-Griffin/Kelley 4th Monday
COMMITTEES NOT ASSIGNED BY THE CITY COUNCIL
East Bay Economic Development
Alliance
Kelley Not a City Appointment
(Appointed by CC Mayors)
283
1 STAFF REPORT TO THE CITY COUNCIL
DATE: Regular Meeting of January 11, 2021
TO: Members of the City Council
VIA: Dante G. Hall, City Manager
SUBMITTED BY: Robert Reber, Community Development Director Larissa Alchin, Contract Assistant Planner
SUBJECT: Continued discussion from City Council meeting held September 28, 2021, on decarbonizing buildings through possible adoption of an all-electric building code amendment
RECOMMENDED ACTION:
Discuss and provide direction if and what type of all-electric ordinance should or should not be pursued.
COMMISSION/SUBCOMMITTEE ACTION AND RECOMMENDATION:
No Commission or Subcommittee actions or recommendations are yet applicable for this action. If an ordinance were to be considered, it would require Planning Commission review. If Council directs staff to initiate adoption of an all-electric ordinance, staff recommends that the process be completed early enough that it can be approved by the California Energy Commission (CEC) no later than September 2022, prior to the start of the next building code cycle that will take effect January 1, 2023.
FISCAL IMPACT OF RECOMMENDATION:
If Council desires an ordinance be drafted, additional but unknown staff and attorney time will be needed to draft the o rdinance, notice and hold required public hearings, and then implement a mandatory program, which would also affect costs of construction in Hercules.
BACKGROUND:
At the regular City Council meeting held on September 28, 2021, following a presentation by staff, City Council members present agreed to continue the discussion to a date uncertain to enable the full City Council an opportunity to provide feedback to staff. The September 28 staff report to City Council provided an in -depth look at all -electric ordinances (see Attachment 1) . During the September 28 meeting, Council members asked staff to provide additional information regarding the range of ordinance types, example ordinance, feasibility, and power grid capacity. 284
2 DISCUSSION:
Types of Reach Codes
Local jurisdictions have adopted two types of reach codes:
Prescriptive codes, which require one or more specific energy efficiency measures; and Performance codes, which require buildings perform more efficiently based on accepted computer modelling and allow trade-offs between energy efficiency measures.
Additionally, some related codes do not specifically require increased energy efficiency, but they may cause less energy to be used or they may increase the likelihood of electrification and therefore reduced greenhouse gas emissions. Examples of this type of code are requiring EV charging stations or requiring a home energy audit.
Table 1 - Prescriptive & Performance Reach Codes
Reach Code Type Examples
Prescriptive Banning new natural gas infrastructure;
Requiring all-electric power source for new construction in most common occupancy types;
Requiring all-electric power source for new construction and substantial remodels.
See Attachment 2: All-Electric Model Reach Code
Performance Fuel-Neutral Reach Code requir ing stricter energy efficiency, renewable energy, and energy storage requirements for newly constructed buildings regardless of energy power source (electricity and natural gas OR electricity only). All new mixed-fuel buildings must comply with stricter performance standards or prescriptive requirements such as being all-electric.
See Attachment 3: Electric-Preferred Model Reach Code
Local jurisdictions have adopted a variety of reach codes for the current (2019) three-year code cycle which took effect January 1, 2020. These adopted reach codes include performance-based “Fuel- Neutral” ordinances (such as those adopted by the cities of San Rafael and Albany), which require new buildings comply with greater energy performance levels regardless of building power source.
The “Electric Preferred” ordinance adopted by Marin County requires only mixed-fuel buildings comply with greater energy performance levels to offset the effects of continued natural gas use. Some prescriptive “All-Electric” reach codes, such as that adopted by the City of Campbell, ban natural gas for specific appliance uses such as water and space heating while still allowing gas for fireplaces and cooking. The cities of Petaluma and Berkeley have adopted “Gas Ban” or “All-Electric” ordinances whereby no new gas lines or hookups are allowed in certain new construction.
As of September 2021, 49 local justifications in California had adopted reach codes to reduce their reliance on natural gas and improve energy efficiency (see Attachment 4). On February 18, 2020, Richmond was the first city in Contra Costa County to adopt a reach code banning natural gas for 285
3 space/water heating and cloth dryers in new single-family and low-rise multifamily units. Richmond is currently working on an update to its reach codes to make it more stringent in anticipation of the upcoming Title 24 update. On December 14, 2021, the Contra Costa County Board of Supervisors voted to waive the first reading and set a date of January 18, 2022, for a public hearing to consider adoption of an ordinance amending the County’s building code to require all newly constructed residential buildings, hotels, offices, and retail buildings to be constructed as all-electric buildings without natural gas infrastructure (see Attachment 5).
Figure 1- Adopted Reach Codes
Feasibility of All-Electric Ordinance
The feasibility of switching to all-electric energy sources compared to the current hybrid model of gas and electric power depend on the installation of solar photovoltaic (PV) systems, battery storage, and improving efficiencies. Starting with the 2019 Title 24 update, all new single-family and low-rise multi-family buildings are required to install PV systems that cover the projected annual electrical usage. With the 2022 Title 24 update, current solar requirements will be coupled with PV battery storage to increase the availability of energy when needed at night and on cloudy/smoky days .
Additionally, s tarting in 202 3, new high-rise multifamily units, hotels -motels, schools, and commercial buildings will also be required to install PV and battery systems. The solar systems must also be sized to provide for the full annual energy usage of the building, based on the floor area of the building and climate zone where the building is located. Nevertheless, there are exceptions to the PV mandate, like a property being too shaded or having too small a roof to install solar panels.
Local weather patterns impact how much energy a building consumes and accordingly the amount of energy certain measures may save. Provisions in the California Energy Code account for climate variation by dividing the state into sixteen climate zones. Hercules contains two climate zones: 91.8% 286
4 of the existing building stock is located in Climate Zone 3, and 8.2% is located in Climate Zone 12.1 Cost effectiveness studies model energy performance using weather patterns from each climate zone to better approximate energy savings and therefore cost -effectiveness in each climate zone . The California Energy Codes & Standards Study ( Attachment 6) contains the full methodology, assumptions and building prototypes used in the low-rise residential cost-effectiveness studies. Cost effectiveness studies analyze two different metrics (utility bill impacts and time-dependent valuation) to assess cost-effectiveness in newly constructed residential buildings. Both methodologies require estimating and quantifying the incremental costs and energy savings associated with energy efficiency measures. The main difference between the methodologies is the way they value energy and thus the cost savings of reduced or avoided energy use.
Utility Bill Impacts (On-Bill): Customer-based Lifecycle Cost (LCC) approach that values energy based upon estimated site energy usage and customer on-bill savings using electricity and natural gas utility rate schedules over a 30-year duration, accounting for discount rate and energy cost inflation.
Time-Dependent Valuation (TDV): This methodology is intended to capture the “societal value or cost” of energy use including long-term projected costs such as the cost of providing energy during peak periods of demand and other societal costs such as projected costs for carbon emissions, as well as grid transmission and distribution impacts. This metric values energy use differently depending on the fuel source (gas, electricity, and propane), time of day, and season. Electricity used (or saved) during peak periods has a much higher value than electricity used (or saved) during off -peak periods. The Energy Commission uses this methodology in evaluating cost-effectiveness for efficiency measures in Title 24, Part 6.
The cost-effectiveness study measures the benefit-to-cost ratio of multiple energy saving measures over a 30-year time frame, taking into account future savings, costs, and financing of incremental first costs. Energy efficiencies studied include but are not limited to cool roofs, slab insulation, wall & attic insulation, and HVAC duct measures. Results are presented as On-Bill benefit-to-cost (B/C) ratio or Time Dependent Valuation (TDV) B/C ratio. A value equal to one is equivalent to the incremental cost and a value greater than one represents a positive return on investment. The tables below show the results from the Cost-Effectiveness report for new low-rise single-family homes and multi-family units in Hercules. The City of Hercules Climate Zone 3 cost-effectiveness study also provide s calculations for new and existing office, retail, and hotel buildings (see Attachment 7).
1 Climate Zone 3 is typified by hot dry summers and warm winters (distinct wet and dry seasons; low rainfall and low humidity; no extreme cold but can be cool in winter; hot to very hot summers common; significant diurnal temperature range). Climate Zone 12 experiences cooler winters and hotter summers than Climate Zone 3, with some lower areas receiving frost on winter nights. 287
5 Table 2 – Benefit-to-Cost Ratios of Energy Options for New Single-Family Homes in Hercules
Table 3 – Benefit-to-Cost Ratios of Energy Options for New Low-Rise Multifamily Units in Hercules
Package B/C TDV B/C
High-Efficiency Appliances 1.73 1.58
EE + PV 2.43 1.73
EE + PV + Battery 1.32 1.64
Electrification 0.58 1.46
Electrification + EE + PV 4.18 ∞
Electrification + PV (neutral cost) ∞ ∞
The following Energy Efficiencies (EE) were included as part of the climate zone 3 new single-family home packages: verified low-leakage ducts in condition spaces, R-10 perimeter slab insulation, basic compact hot water distribution design credit, 0.35 cfm (cubic feet p er minute) HVAC system, minimum code compliant PV, and 5-kWh battery storage. No Energy Efficiency packages alone were found to be cost-effective and therefore not included for multifamily units. The only package which did not show a positive On-Bill ratio was the Electrification package which compares a 2019 code compliant all-electric home with a 2019 code compliant mixed -fuel home, and does not include improved efficiencies, HE appliances, increased PV scaling, or battery storage.
The cost-effectiveness study for climate zones 3 and 12 show reach codes requiring all-electric fuel in new construction would result in a positive return on investment in nearly all new residential and nonresidential construction in Hercules. Furthermore, requiring new construction to be electric-ready as the new 2022 Title 24 update proposes would likely make mixed-fuel buildings more costly to build as they require the added cost of gas lines.
Power Grid Capacity
According to a 2019 study by Energy and Environmental Economics, Inc.,4 the California grid is a summer peaking system, with peak electricity demand driven by residential and commercial air conditioning. This means that the summer peak load is used to plan systemwide capacity additions and investments. Residential and commercial building electrification will lead to an increase in winter
2 Ratios listed “∞” indicate cases where there are both first cost savings and annual utility bill savings; upgrade and benefits are realized immediately.
3 The cost savings for the all-electric code compliant home ("Electrification" package) is invested in a larger PV system, sized to result in a lifetime incremental cost of zero based on the On-Bill approach, relative to a mixed-fuel home. 4 Residential Building Electrification in California:
https://www.ethree.com/wp-content/uploads/2019/04/E3_Residential_Building_Electrification_in_California_April_2019.pdf Package B/C TDV B/C
Energy Efficiency (EE) 2.60 2.36
High-Efficiency Appliances 1.76 1.62
EE + PV 2.22 1.68
EE + PV + Battery 1.50 1.58
Electrification 0.55 1.53
Electrification + EE + PV 2.88 ∞2
Electrification + PV (neutral cost)3 ∞ ∞
288
6 electricity demand across all climate zones. However, as the study suggests, even in a relatively high residential building electrification future, buildings’ contribution to statewide winter electricity demand is likely to remain lower than the residential summer peak demand levels. Currently, most natural gas consumption is attributed to water and space heating in the home, which generally increase in the winter months during off-peak electricity demand.
Without additional energy efficiency measures, widespread use of electric space and water heating could increase California’s overall electricity use by approximately 19 percent . However, when coupled with energy efficiencies, PV systems, and batteries (as required by the energy code), those grid impacts would be reduced. In California, space heating accounts for 40 percent of natural gas use in residential and commercial buildings combined. Electric heat pumps are an energy-efficient heating and cooling system that can heat buildings by moving heat from outdoors to indoors (during winter) and cool buildings by moving heat from indoors to outdoors (during summer). Similarly, induction cooktops, heat pump electric clothes dryers, and electric water heat pumps and solar hot water heaters are high efficiency and reduce the impact of increased electric grid use.
Furthermore, a 2018 Synapse Energy Economics 5 study that modeled the impacts of building electrification scenarios on the grid in the winter and summer, confirmed that California’s electricity infrastructure is well equipped for electrification and that the new winter demand from space and water heating needs would remain below the summer peak demand. Northern California PG&E customers (including Hercules) consume the majority of natural gas in the state. Under a n “unmanaged” scenario in which 50 percent of the natural gas used in new and existing building is converted to electric for space and water heating, PG&E’s winter peak loads would begin to surpass summer peak loads as shown in Figure 4. Converting 50 percent of buildings to electric space and water heating will be a slow process with natural gas currently accounting for 86 percent of space heating and 90 percent of water heating in residential buildings. Similarly, natural gas is used to heat water in 95 perc ent of commercial buildings and for 80 percent of space heating in Northern California. Nonetheless, according to the Synapse study, if PG&E becomes a winter-peaking utility in the future , it is unlikely to require additional generation supply but could req uire additional transmission and distribution upgrades to serve load in its territory.
5 Decarbonization of Heating Energy Use in California Buildings:
https://www.synapse-energy.com/sites/default/files/Decarbonization-Heating-CA-Buildings-17-092-1.pdf 289
7 Figure 2 – PG&E electrification impacts in a 50% building electrification scenario
During the summer months, electrification will result in relatively minor additional load from water heating, but very little additional load from space heating. The graphs below depict the expected hourly load shapes from water and space heating on a peak summer day and a peak winter day.
Figure 3 - Residential peak summer and winter space and water heating
The graphs indicate that water heating load is highest during the morning and late evening hours.
Electric water heating in the summer would likely draw energy form the grid. However, a portion of 290
8 the load could be shifted to off peak hours through time-of-use rates and through water heaters’ ability to heat water during off-peak hours and store it for use during peak hours.
With increased Title 24 energy efficiency standards for 2022, including heat pump technology use for space and water heating, PV systems and batteries sized to provide the total electricity usage of a home, all electric newly constructed buildings would likely have minimal impact on the summer and winter grid demand.
Direction to Staff
As described above, reach codes can be either prescriptive codes, which require one or more specific energy efficiency measures, or performance codes, which require buildings perform more efficiently through a variety of optional measures regardless of fuel source. Performance reach codes require energy modeling to craft policies which exceed minimum building energy performance by a certain percentage and are generally more complicated to develop and enforce . The prescriptive and performance approaches can also be combined as a hybrid reach code.
Staff is requesting the Council provide direction on the following:
1. Does the Council wish to adopt a building decarbonization ordinance (Electrification Ordinance)?
2. If so, does the Council wish to adopt by reference the County’s pending ordinance, or adopt an ordinance of its own?
3. If the latter, does Council prefer a prescriptive or a performance-based ordinance?
4. What projects would be subject to the ordinance?
o New single-family residential
o New multi-family residential
o New accessory dwelling units
o New commercial buildings
o Substantial remodel of existing buildings
5. Will any exceptions be allowed?
o Affordable housing projects
o Cooking appliances (commercial and/or residential)
o Outdoor fireplaces/pits and grills
o Medical
o Laboratories
o Emergency facilities
6. When will the ordinance take effect?
o Immediately upon approval, which effects the current 2019 building code o With the 2022 update which takes effect January 1, 2023
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9 ATTACHMENTS:
1. Staff Report to the City Council – September 28, 2021
2. All-Electric Model Reach Code
3. Electric-Preferred Model Reach Code
4. 2019 Code-cycle adopted reach codes
5. Contra Costa County Ordinance No. 2022-02 All-Electric Buildings
6. California Energy Codes & Standards Study
7. Summary Cost-Effectiveness results for Hercules Climate Zone 3
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1 STAFF REPORT TO THE CITY COUNCIL
DATE: Regular Meeting of September 28, 2021
TO: Members of the City Council
SUBMITTED BY: Robert Reber, Community Development Director Larissa Alchin, Contract Assistant Planner
SUBJECT: Discussion of building decarbonization through possible adoption of all- electric building code amendment
RECOMMENDED ACTION:
Discuss and p rovide direction if and w hat type of a ll-electric ordinance should or should not be pursued.
COMMISSION/SUBCOMMITTEE ACTION AND RECOMMENDATION:
No Commission or Subcommittee actions or recommendations are yet applicable for this action. If an ordinance were to be considered, it would require Planning Commission review. If Council directs staff to initiate adoption of an all-electric ordinance, staff recommends that the process be completed early enough that it can be approved by the California Energy Commission (CEC) no later than September 2022, prior to the start of the next building code cycle that will take effect January 1, 2023.
FISCAL IMPACT OF RECOMMENDATION:
If Council desires an ordinance be drafted, additional but unknown staff and attorney time will be needed to draft the o rdinance, notice and hold required public hearings, and then implement a mandatory program, which would also affect costs of construction in Hercules.
BACKGROUND:
The primary component in natural gas is methane. Methane is a short -lived pollutant whose contribution to climate change (“global warming potential”) is, pound for pound, 25 times greater than carbon dioxide over a 100-year period. In addition to being a source of greenhouse gas emissions, natural gas has other attributes negatively affecting public health and safety. Indoor natural gas use, particularly for cooking, worsens indoor air quality, which disproportionately harms children, who are 42% more likely to develop asthma as a result of exposure. Ruptures in natural gas lines caused by earthquakes pose a secondary hazard of fires (half of the fires in San Francisco after the 1989 Loma Prieta earthquake were due to ruptured gas lines). Reducing a community’s reliance on the natural 293
2 gas system improves its physical resilience, reduces fire risk , simplifies building systems and maintenance, and reduces greenhouse gas emissions.
In September 2018, Governor Jerry Brown signed two bills aimed at reducing greenhouse gas emissions from buildings, SB 1477 and AB 3232. SB 1477 calls on the California Public Utilities Commission (CPUC) in consultation with the California Energy Commission (CEC) to develop two new programs: the Building Initiative for Low Emissions Development (BUILD) program and the Technology and Equipment for Clean Heating (TECH) program to promote the use of high efficiency building appliances. AB 3232 required the CEC to develop a feasibility assessment (Building Decarbonization Assessment) for reducing greenhouse gas emission of buildings to 40 percent below 1990 levels by 2030. According to the
California Building Decarbonization Assessment – Final
Commission Report presented to the CEC on August 11, 2021,1 residential and commercial buildings jointly account for 25 percent of greenhouse gas (GHG) emissions and 70 percent of electricity use in the state. The assessment concludes that reducing building emissions is an essential component of meeting California’s GHG reduction targets.
State Building Code
Every three years, the State of California adopts new building standards that are codified in Title 24 of the California Code of Regulations, referred to as the California Building Standards Code (“Building Code”). This regular update is referred to as a “code cycle.” The current code cycle is for the year 2019 and was adopted by Hercules, via Ordinance No. 526 with amendments adopted by Contra Costa County and the Rodeo–Hercules Fire Protection District. The next code cycle will be for the year 2022 and will become effective statewide on January 1, 2023.
On August 11, 2022, the CEC approved the 2022 Energy Code which includes elements to incentivize all-electric construction for newly constructed and renovated buildings to increase efficiency and lower emissions. The 2022 Energy Code focuses on four key areas in newly constructed buildings:
• Encouraging electric heat pump technology for space and water heating, which consumes less energy and produces fewer emissions than gas-powered units. • Establishing electric-ready requirements for single-family homes to position owners to use cleaner electric heating, cooking, and electric vehicle (EV) charging options whenever they choose to adopt those technologies.
• Expanding solar photovoltaic (PV) system and battery storage standards to make clean energy available onsite and complement the state’s progress toward a 100% clean electricity grid. • Strengthening ventilation standards to improve indoor air quality.
The proposed 2022 Energy Code stops short of requiring new buildings to be exclusively electric (gas ban); nevertheless, the code does require homes to be electric-ready, with dedicated 240-volt outlets and space (with plumbing for water heaters) so electric appliances can eventually replace installed gas appliances (see Attachment 2 for 2022 Building Energy Efficiency Standards Summary passed by the CEC). The proposed code update for 2022 does not dictate the type of energy to be used in buildings (as between such options as natural gas, propane, or electricity). Rather, the code applies prescriptive or performance-based standards to each individual building design submitted for review.
1 https://efiling.energy.ca.gov/GetDocument.aspx?tn=239311 294
3 The 2022 update next moves to the California Building Standards Commission (CBSC) for approval and is scheduled for consideration in December 2021. If approved, the building standards will go into effect January 1, 2023, to provide time for all interested parties to prepare for the changes.
DISCUSSION:
The State of California allows cities to amend the California Building Standards Code to make them more restrictive by adopting “Reach Codes.” When a local government adopts a reach code, that agency must make an official finding that the new requirements save energy and are cost-effective.
To be cost effective, the money saved from the reduced energy costs needs to be enough to cover the initial cost within a reasonable period of time. Therefore, exploring cost-effectiveness is a key step for local governments in California interested in establishing a reach code. There is no official method for determining cost effectiveness, but local governments must make a cost -effectiveness determination, based on the method they deem appropriate, and provide such evidence to the California Energy Commission.
In practice, cost-effectiveness is often measured by a benefit-to-cost ratio, whereby the benefit is the total energy bill savings expected from the energy conservation measure(s) , and the cost is the incremental cost of installing the measure(s). A ratio of at least 1.0 is considered cost -effective, indicating the benefit exceeds the cost.
Another commonly used measure of cost-effectiveness is “simple payback,” which is calculated by dividing the up-front installation cost by the annual utility savings. The resulting value indicates the number of years it takes to pay back the initial cost. Generally, an energy -efficiency measure is considered cost-effective when it pays back in less than 15 years. The exact cutoff value is a matter of opinion and depends on the context, but usually falls between 10 and 20.
Each cost-effectiveness study sets out to evaluate a specific set of energy conservation measures (e.g., home energy efficiency measures) for one or more specific building types (e.g., new single-family homes). The studies start with a digital building model that reasonably represents a typical building of that type in California. Next, installation costs are typically estimated for each measure by surveying building contractors. Then software is used to simulate the energy needs of the building with and without the measures. From these simulations, savings estimates are derived. B esides measuring benefit-to-cost ratio, cost-effectiveness studies also present additional results related to how much energy, money, and emissions are saved. As weather patterns and utility rates differ across the state, the cost-effectiveness energy-efficiency measures may differ from one location to another.
Cost-effectiveness studies model cost-effectiveness using climate zones to approximate the local weather pattens.
Cost-effectiveness studies can be funded directly by a city, but most studies are developed with the California Energy Codes & Standards Reach Codes Subprogram which is funded by ratepayer funds.
Using an automated online tool
2 provided through this statewide utility program, City staff have generated a preliminary sample estimate of co st effectiveness in Hercules for possible energy efficiency measures (see Attachment 3).
Some cities and counties in California have already adopted reach codes to go above and beyond the statewide building code to require building electrification using an array of building code approaches.
2 Cost Effectiveness Explorer: https://explorer.localenergycodes.com/ 295
4 According to the Sierra Club, as of September 2021, 49 cities and counties (about 10% of jurisdictions statewide) have adopted reach codes to reduce their reliance on gas. In addition, the California Green Building Standards (“CAL Green” Part 11 of Title 24) includes voluntary reach standards and offers model building code language for local governments that wish to adopt reach codes that exceed the minimum statewide requirements. Table 1 below offers a sample of recently adopted reach codes and the range of approaches.
Table 1 – Adopted Electrification Ordinances
City Residential Commercial Remodels Exemptions Date
Adopted
Fairfax Yes Yes No Commercial kitchens 8/4/2021
Emeryville Yes No Remodels of
50% or more
Nonresidential
buildings but must be
pre-wired for future
electric appliances
7/20/2021
Petaluma Yes Yes Substantial
remodels or
addition of 50%
or more
Essential Services
Buildings and backup
power facilities for
Essential Services
Buildings.
5/3/2021
Daly City Yes Yes No 100% affordable
housing, ADUs,
commercial kitchens,
and laboratories
4/27/2021
Piedmont Yes Yes Based on project
evaluation and
Home Energy
Score
A Home Energy Score
Report demonstrating
a Home Energy Score
of 7
2/1/2021
Millbrae Yes Yes No Laboratories, and most
residential buildings
may have non-electric
cooking and fireplaces
10/27/2020
East Palo Alto Yes Yes No Affordable housing,
and commercial
kitchens
10/6/2020
In addition to the adopted reach codes referenced above, Contra Costa County’s Sustainability Commission voted on August 23, 2021, to present a letter and report to the Board of Supervisors in support of adopting building electrification reach codes for new construction.
Removing natural gas as an energy option would reduce the carbon footprint of buildings in Hercules by removing or reducing a source of greenhouse gas emissions from buildings. If Hercules adopts an all-electric ordinance, the building code amendment could remove natural gas as a possible energy source for new construction and remodels as directed by the City Council. Should the City Council direct staff to proceed with the development of an all- electric ordinance requiring new buildings and/or substantial remodels to be all-electric, an initial discussion of parameters would be helpful to enable staff to develop a proposed ordinance.
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5 General Steps to Develop All-Electric Ordinance
Figure 1 below provides a generalized timeline for implementing the following steps necessary to adopt and implement a reach code ordinance (actual time to implement may vary depending on the scope and nature of the ordinance and the resources available):
1. Develop idea for a reach code ordinance:
o Ideas for reach codes can come from several places, including direction from City Council, General Plan policies, and neighboring jurisdictions.
2. Work with stakeholders:
o Both internal and external stakeholders such as elected officials, building officials and staff, local developers and contractors, environment advocacy groups , and others involved in implementing and enforcing the reach code.
3. Obtain a cost-effectiveness study
4. Develop and draft an ordinance
o All-electric reach codes typically include the purpose of the reach code, what types of buildings and actions trigger the reach code, whether there are any exceptions to or exemptions from reach code requirements, relevant definitions and interpretations and any additional administrative requirements. (See Attachment 2 for a model ordinance)
5. Public process and revisions
o The proposed draft ordinance would initially be considered by the Planning Commission followed by review and consideration by the City Council.
6. Formal adoption process
o Since a reach code is a local ordinance, it is adopted by the City Council.
7. Application for approval by California Energy Commission o Once the local reach code is adopted, but before it can be enforced, the ordinance must be submitted to the CEC. The CEC will verify that the reach code is at least as stringent as the California Energy Code and then post the reach code and accept comments on it for 60 days.
Figure 1 - BAYREN Generalized Timeline
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6 ATTACHMENTS:
1. 2021 Building Energy Efficiency Standards Summary
2. All-Electric Model Code Ordinance
(version of the Menlo Park all-electric code, edited by Peninsula Clean Energy and Silicon Valley Clean Energy for use as a model)
3. Sample estimate of cost effectiveness results for Hercules 298
Please Note:
This template is intended for educational purposes only, without any express or implied warranty of any kind, including warranties of accuracy, completeness, or fitness for any particular purpose. You agree that your use of the template is without any recourse whatsoever to PG&E, SCE, SDG&E, SCG, or their affiliates. The template is a draft, and anyone using this document should seek the advice of an attorney to develop appropriate ordinance language to meet its jurisdiction’s specific needs, as state and local laws may differ.
Please contact the Codes and Standards Reach Codes Team at [email protected] for additional information.
T his document is the product of a collaborativ e effort by B uilding D ecarbonization C oalition, B ay R E N, PC E /S V C E , and the I OU S tatewide C odes and S tandards, R each C odes Program.
This program is funded by California utility customers and administered by Pacific Gas and Electric Company, San Diego Gas & Electric Company (SDG&E®), Southern California Edison Company and Southern California Gas Company (SoCalGas®) under the auspices of the California Public Utilities Commission and in support of the California Energy Commission.
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2020-11-01 1
NEW CONSTRUCTION MODEL REACH CODE, ALL -ELECTRIC VERSION 1.0
What’s New .......................................................................................................................... 2 Scope .................................................................................................................................... 2 Instructions ........................................................................................................................... 3 Sample Amendments ............................................................................................................. 4 Purpose .........................................................................................................................................4 Definitions .....................................................................................................................................4 Mandatory All-Electric Requirements .............................................................................................5 Nonresidential and High-Rise Residential Buildings .........................................................................6 Mandatory Solar PV Requirements ...................................................................................................................... 6 Performance Requirements ................................................................................................................................. 7 Prescriptive Requirements ................................................................................................................................... 8 Other Sample Ordinance Sections .......................................................................................... 9 Appendix A: Sample Findings ............................................................................................... 10
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NEW CONSTRUCTION MODEL REACH CODE, ALL -ELECTRIC VERSION 1.0
What’s New
• This model reach code ordinance, which is based on the Electric-Preferred Model Ordinance, includes all-electric requirements for the most common occupancies and adds specific requirements for mid-rise residential new construction.
Scope
• All new residential buildings and all new hotels, motels, office buildings and retail buildings must be all-electric, with exceptions for ADUs and hospitals. Jurisdictions may modify the occupancies subject to the all-electric requirements. o The All-Electric requirements of this scope were found to be cost-effective in all climate zones except for:
High-rise (including Mid-rise) residential buildings in Climate Zones 1 and 16; and
Office buildings and hotels in Climate Zone 16.
• All other new mixed-fuel buildings must comply with stricter performance or prescriptive requirements.
• All new buildings must install a PV system as a mandatory measure.
Summary of Requirements by Occupancy
Occupancy All-Electric Solar PV Energy Efficiency
Low-Rise Residential Yes No (required under
State Code) No
High-Rise Residential (includes
Mid-Rise) Yes Yes No
Hotels, Motels, Office and
Retail Yes Yes No
Other Nonresidential No Yes Required for
Mixed-Fuel
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NEW CONSTRUCTION MODEL REACH CODE, ALL -ELECTRIC VERSION 1.0 Instructions
• This is one of three versions. The Electric-Preferred version requires higher efficiency for mixed-fuel buildings. The Fuel-Neutral version requires higher efficiency for all buildings.
The All-Electric version requires all-electric for the most common occupancies and higher efficiency for other mixed-fuel buildings. All versions require solar PV. The latest version of this document and supporting materials are available at LocalEnergyCodes.com. • The performance values and prescriptive measures are based on results from cost effectiveness studies. Jurisdictions may choose a more tailored approach based on the studies, for example, modifying the ordinance to require higher energy performance from all-electric buildings. The Codes and Standards Reach Codes team is available to assist jurisdictions with this process.
• Jurisdictions may also wish to modify elements of the ordinance, such as those marked with the text “[Option]”. For example:
o Adding the electric-readiness supplement for nonresidential and/or residential buildings (requires mixed-fuel buildings to install infrastructure to facilitate future conversion to electric equipment);
o Specifying occupancies subject to the all-electric requirements; o Modifying exception for Accessory Dwelling Units (ADUs) • When modifying the language, ensure all Standards references are maintained and the ordinance still meets the CEC requirements. Also, edit the Purpose section to reflect the changes.
• Prescriptive requirements vary by climate zone and are a complete package of measures that achieve similar efficiency levels as the performance requirements. Those requirements that are not applicable to the climate zone must be deleted and subsequent paragraphs renumbered.
• The model language is intentionally detailed. Jurisdictions may wish to pare it down and leave more discretion to the building administrator. Some of the details could be moved to guidance documents.
• Sample findings are presented as Whereas clauses; alternatively, they may be incorporated as express findings in the ordinance, referenced as an attachment or passed as a separate resolution based on local practice.
• Local authorities for some of the proposed requirements are untested. For example, the electric readiness provisions in the supplement are proposed without a cost-effectiveness analysis on the advice of CEC staff that they are not, in themselves, energy performance requirements.
• The headings, footnotes and instructions (in blue) are for staff reference and should be removed in the final ordinance.
• The draft ordinance text, sample findings and CEQA determination language are provided as examples only. Ensure all ordinance materials are reviewed and verified by relevant jurisdiction staff and the city/county attorney.
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2020-11-01 4
NEW CONSTRUCTION MODEL REACH CODE, ALL -ELECTRIC VERSION 1.0 ORDINANCE AMENDING THE [City/County of Jurisdiction] BUILDING CODE TO REQUIRE
ALL-ELECTRIC DESIGN, SOLAR POWER AND HIGHER ENERGY PERFORMANCE FOR NEW
CONSTRUCTION
DELETE ALL BLUE TEXT AND FOOTNOTES
Sample Amendments
Section 1: Amendments
The California Building Code, Title 24, Article 6, adopted by the [City/County of jurisdiction] codified under Chapter [municipal/county code reference (if not adopted in entirety, include local code references for each section)], is amended as specified below.
Purpose
Section 100.0(e)2 is modified by adding a new Section 100.0(e)2.F as follows:
(F) New Construction Energy Reach Code - Purpose and Intent.
In addition to all requirements of the California Energy Code applicable to new construction, the following shall apply:
i. All newly constructed residential, office, retail, hotel and motel buildings [Option: modify occupancies] shall be All-Electric Buildings as defined in Section 100.1(b).
[Option] EXCEPTION to 100.0(e)2.F.i. Free-Standing Accessory Dwelling Units that are no greater than 400 square feet.
ii. Newly constructed nonresidential that are designed to utilize mixed-fuel (natural gas or propane in addition to electricity) shall comply with either the prescriptive requirements of Section 140.2 or meet stricter compliance margins as specified in Section 140.1.
iii. All newly constructed nonresidential buildings, hotels and motels and high- rise (including mid-rise) residential buildings shall be required to install a solar PV system.
EXCEPTION to 100.0(e)2.F. Hospitals.
Definitions
Section 100.1(b) is modified by adding the following definitions:
ALL-ELECTRIC BUILDING is a building that uses electricity as the source of energy for all of its space heating, water heating, cooking and clothes drying appliances and has no gas plumbing in the building for these end uses. An All-Electric Building may include solar thermal collectors.
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2020-11-01 5
NEW CONSTRUCTION MODEL REACH CODE, ALL -ELECTRIC VERSION 1.0 [Option] CERTIFIED ENERGY ANALYST is a person registered as a Certified Energy Analyst with the California Association of Building Energy Consultants as of the date of submission of a Certificate of Compliance as required under Section 10.103. [Option] FREE-STANDING ACCSESSORY DWELLING UNIT is a detached building that is not intended for sale separate from the primary residence, on a lot that is zoned for single family or multifamily use, located on the same lot as an existing dwelling, and does not exceed 1,200 square feet of total floor area.
MID-RISE RESIDENTIAL BUILDING is a four- to seven-story building that is of residential occupancy.
MIXED-FUEL BUILDING is a building that is plumbed for the use of natural gas or propane as fuel for space heating, water heating, cooking or clothes drying appliances.
Mandatory All-Electric Requirements
Section 100.0(e)2.A is modified as follows:
A. All newly constructed buildings. Sections 110.0 through 110.132 apply to all newly constructed buildings within the scope of Section 100.0(a). In addition, newly constructed buildings shall meet the requirements of Subsections B, C, D or E, as applicable.
The first two paragraphs of Section 110.0 and Section 110.0(a) are modified as follows:
Sections 110.1 through 110.132 specify requirements for manufacturing, construction, and installation of certain systems, equipment, appliances and building components that are installed in buildings within the scope of Section 100.0(a).
NOTE: The requirements of Sections 110.0 through 110.132 apply to newly constructed buildings. Sections 141.0 and 150.2 specify which requirements of Sections 110.1 through 110.12 also apply to additions and alterations to existing buildings.
(a) General Requirements. Systems, equipment, appliances and building components shall only be installed in a building within the scope of Section 100.0(a) if:
1. The manufacturer has certified that the system, equipment, appliances or building component complies with the applicable manufacturing provisions of Sections 110.1 through 110.132, and
2. The system, equipment, appliance or building component complies with all applicable installation provisions of Sections 110.1 through 110.132.
Section 140.0(a) is modified as follows:
(a) The requirements of Sections 100.0 through 110.123 applicable to the building project (mandatory measures for all buildings).
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2020-11-01 6
NEW CONSTRUCTION MODEL REACH CODE, ALL -ELECTRIC VERSION 1.0 A new section is added, 110.13, as follows:
Section 110.13 – ALL-ELECTRIC REQUIREMENTS
All newly constructed residential, office, retail, hotel and motel buildings [Option:
modify occupancies]1 shall be designed, constructed, and equipped as All-Electric Buildings.
[Optional] EXCEPTION to Section 110.13. Free-Standing Accessory Dwelling Units.
Nonresidential and High-Rise Residential Buildings
Mandatory Solar PV Requirements
Section 140.0(b) is modified as follows:
(b) The requirements of Sections 120.0 through 130.56 (mandatory measures for nonresidential, high-rise residential and hotel/motel buildings).
A new Section 130.6 is added as follows:
130.6 – SOLAR PHOTOVOLTAICS
(a) Newly constructed nonresidential buildings, hotels, motels and high-rise residential buildings other than Mid-Rise Residential Buildings, shall install a solar PV system on the entire solar zone, as specified in Section 110.10.
(b) Newly constructed Mid-Rise Residential Buildings shall install a solar PV system with at least 0.3 kWDC capacity per dwelling unit. [Option: Modify value. See cost effectiveness study]
EXCEPTION 1 to Section 130.6(b). If the projected annual energy generated by the solar PV requirement specified above is greater than or equal to the projected annual site energy consumption, the size of the solar PV system may be reduced such that the projected generation is equal to the projected site energy consumption.
EXCEPTION 2 to Section 130.6(b). Buildings with a permanently installed domestic solar water-heating system complying with Section 150.1(c)8Biii.
EXCEPTION 3 to Section 130.6(b). Solar PV is installed on all sections of the roof that have adequate solar exposure. Areas that have adequate solar exposure include roof areas with no dimension less than five feet and no less than 160 square feet on low-sloped roofs where the annual solar access is 70 percent or greater and on steep-sloped roofs oriented between 90 degrees and 300 degrees of true north where the annual solar access is 70 percent or greater. Solar access is the ratio of solar insolation including shade to the solar insolation without shade. Shading from
1 All-Electric construction was found to be cost-effective for all occupancies specified above in all climate zones except: mid-rise and high-rise residential buildings, hotels and motels in Climate Zones 1 and 16; and office buildings in Climate Zone 16.
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NEW CONSTRUCTION MODEL REACH CODE, ALL -ELECTRIC VERSION 1.0 obstructions located on the roof or any other part of the building shall not be included in the determination of annual solar access.2
Performance Requirements
If low-rise residential buildings are not required to be all-electric, consider adding the performance and prescriptive requirements from the Electric-Preferred Version of model ordinance.
Section 140.1 is modified as follows:
SECTION 140.1 – PERFORMANCE APPROACH: ENERGY BUDGETS
An addition or alteration to an existing building or a newly constructed All-Electric Building complies with the performance approach if the energy budget calculated for the Proposed Design Building under Subsection (b) is no greater than the energy budget calculated for the Standard Design Building under Subsection (a).
A newly constructed Mixed-Fuel Building complies with the performance approach if the energy budget calculated for the Proposed Design Building under Subsection (b) has a compliance margin, relative to the energy budget calculated for the Standard Design Building under Subsection (a), of at least 5%. [Verify/modify compliance margins by climate zone.]3
(a) Energy Budget for the Standard Design Building. The energy budget for the Standard Design Building is determined by applying the mandatory and prescriptive requirements to the Proposed Design Building. The energy budget is the sum of the TDV energy for space-conditioning, indoor lighting, mechanical ventilation, service water heating, and covered process loads.
(b) Energy Budget for the Proposed Design Building. The energy budget for a Proposed Design Building is determined by calculating the TDV energy for the Proposed Design Building. The energy budget is the sum of the TDV energy for space-conditioning, indoor lighting, mechanical ventilation and service water heating and covered process loads.
(c) Calculation of Energy Budget. The TDV energy for both the Standard Design Building and the Proposed Design Building shall be computed by Compliance Software certified for this use by the Commission. The processes for Compliance Software approval by the Commission are documented in the ACM Approval Manual.
EXCEPTION 1 to Section 140.1. For newly constructed buildings, if the Certificate of Compliance is prepared and signed by a Certified Energy Analyst and the energy budget
2 Language for exceptions 1 and 2 is based on solar zone exceptions in Section 110.10(b). 3 5% was found to be cost-effective except in Climate Zones 11, 13, 14, and 15. To customize these values to your climate zone and policy priorities, reference the findings in Figures 41-43 of the Nonresidential New Construction Cost-Effectiveness Study and Tables 7 and 8 of the 2019 Mid-Rise New Construction Reach Code Cost-Effectiveness Study. You may wish to contact the Codes and Standards team for technical assistance. 306
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NEW CONSTRUCTION MODEL REACH CODE, ALL -ELECTRIC VERSION 1.0 for the Proposed Design is no greater than the Standard Design Building, the required compliance margin is reduced by 1%, but in no event shall be less than 0.
EXCEPTION 2 to Section 140.1. Hospitals and newly constructed buildings with mechanical systems but no indoor lighting may comply with a 0% compliance margin.
NOTE: Authority: Sections 25213, 25218, 25218.5, 25402 and 25402.1, Public Resources Code. Reference: Sections 25007, 25008, 25218.5, 25310, 25402, 25402.1, 25402.4, 25402.5, 25402.8, and 25943, Public Resources Code.
Prescriptive Requirements
This section applies to all newly-constructed buildings that are not otherwise required to be All-Electric, pursuant to Section 110.13. If any of the occupancies required to be all-electric in Section 110.13 are deleted, consider adding the prescriptive requirements for those occupancies from the Electric-Preferred version of the model ordinance.
Section 140.2 is modified as follows:
To comply using the prescriptive approach, a building shall be designed with and shall have constructed and installed systems and components meeting the applicable requirements of Sections 140.3 through 140.9 and additionally the following measures for newly constructed Mixed-Fuel Buildings, as applicable:
(a) Requirements:
1. Install fenestration with a solar heat gain coefficient no greater than 0.22.
2. Limit the fenestration area on east-facing and west-facing walls to one-half of the average amount of north-facing and south-facing fenestration.
3. Design Variable Air Volume (VAV) box minimum airflows to be equal to the zone ventilation minimums where VAV systems are installed.
4. Include economizers and staged fan control in air handlers with a mechanical cooling capacity ≥ 33,000 Btu/h.
5. Reduce the lighting power density (Watts/ft2) by ten percent (10%) from that required from Table 140.6-C.
6. Improve lighting without claiming any Power Adjustment Factor credits A. Perform Institutional Tuning per Section 140.6(a)2.J, and* B. In office spaces, control to daylight dimming plus off per Section 140.6(a)2.H, and
C. Install Occupant Sensing Controls in Large Open Plan Offices per Section 140.6(a)2.I.
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NEW CONSTRUCTION MODEL REACH CODE, ALL -ELECTRIC VERSION 1.0 Other Sample Ordinance Sections
Section 3: Infeasibility
If an applicant for a Covered Project believes that circumstances exist that make it infeasible to meet the requirements established by the local amendments to the State Energy Code, Title 24, Article 6, the applicant may request a modification. In applying for the modification, the burden is on the Applicant to demonstrate infeasibility to the City’s Building Official.
Section 4: CEQA
This ordinance is exempt from CEQA under 15061(b)(3) on the grounds that these standards are more stringent than the State energy standards, there are no reasonably foreseeable adverse impacts and there is no possibility that the activity in question may have a significant effect on the environment.
Section 5: Severability
If any word, phrase sentence part, section, subsection or other portion of this amendment or any application thereof to any person or circumstance is declared void, unconstitutional, or invalid for any reason, then such word, phrase, sentence, part, section, subsection, or other portion, or the prescribed application thereof, shall be severable, and the remaining provisions of this amendment, and all applications thereof, not having been declared void, unconstitutional or invalid, shall remain in full force and effect. The [name of governing body] hereby declares that it would have passed this amendment and each section, subsection sentence, clause and phrase of this amendment, irrespective of the fact that any one or more sections, subsection, sentences, clauses or phrases is declared invalid or unconstitutional.
Section 6: Violations
Violation of the requirements of this Chapter shall be considered an infraction of the [jurisdiction Municipal/County Code], punishable by all the sanctions prescribed in [cite local reference to infractions].
Section 7: Effective Date
Building permit applications submitted after January 1, 2020 or after the California Energy Commission approves these amendments, whichever is later, shall be required to comply with the requirements set forth herein.
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NEW CONSTRUCTION MODEL REACH CODE, ALL -ELECTRIC VERSION 1.0 Appendix A: Sample Findings
Findings may be included as Whereas clauses, as express findings in the ordinance, as referenced attachments or as part of a separate resolution, depending upon local practice.
WHEREAS, Public Resources Code Section 25402.1(h)(2) allows more stringent local amendments to the energy conservation provisions in the California Energy Code; and WHEREAS, the California Codes and Standards Reach Code Program, has determined specific modifications to the 2019 State Energy Code for each climate zone that have been found to be cost-effective; and
WHEREAS, that such modifications will result in designs that consume less energy than they would under the 2019 State Energy Code; and
WHEREAS, the Council expressly declares that the proposed amendments to the Energy Code are reasonably necessary because of local [include any or all that apply: climatic, topological, and geological] conditions; and
WHEREAS, rupture of natural gas and propane lines as a result of a seismic event poses a risk of fire or explosion; and
WHEREAS, prolonged disruption of natural gas service as a result of a seismic event presents a safety risk to the community; and
WHEREAS, combustion of natural gas in buildings poses an indoor air quality risk; and, WHEREAS, failure to address and significantly reduce greenhouse gas (GHG) emissions could result in rises in sea level that could put at risk [Jurisdiction] homes and businesses, public facilities, and [cite any particular infrastructure at risk]; and WHEREAS, due to changes in rainfall patterns expected with climate change, the [City/County of jurisdiction] is likely to be subject to more severe weather events, including droughts as well as more intense storms that increase the risks of wildfire, erosion, overland local flooding and landslides; and
WHEREAS, it is expected that climate change will result in more severe and frequent extreme heat events, intensifying local heat islands and putting vulnerable populations at health risk; and
WHEREAS, the [City/County of jurisdiction] is committed to reducing greenhouse gas emissions in accordance with the United States’ original commitment to the Paris Climate Accord; and WHEREAS, the State of California enacted Senate Bill (SB) 32 to require greenhouse gas emissions to be reduced to 40 percent below 1990 levels by 2030; and WHEREAS, the [City/County of jurisdiction] Climate Action Plan recommends [cite plan elements that relate to the proposed ordinance]; and
WHEREAS, highly efficient buildings enhance the public health, welfare and resiliency of the [City/County of jurisdiction]; and
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NEW CONSTRUCTION MODEL REACH CODE, ALL -ELECTRIC VERSION 1.0 WHEREAS, it is reasonably necessary to require buildings to produce renewable, low-carbon electricity and to reduce energy consumption through efficient design in order to reduce the effects of climate change, reduce regional pollution and improve resilience to climate change; and
WHEREAS, the California Energy Code, 2019 Edition, Title 24, Part 6 of the California Code of Regulations was adopted by the [City/County of jurisdiction] with local amendments on [date] under Ordinance [number] and codified under [cite reference to local code]; and WHEREAS, the requirements specified in this Ordinance were [cite any public process, commission or subcommittee review/approvals].
NOW, THEREFORE, BE IT RESOLVED that the [City/County of jurisdiction] does ordain as follows:
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Please Note:
This template is intended for educational purposes only, without any express or implied warranty of any kind, including warranties of accuracy, completeness, or fitness for any particular purpose. You agree that your use of the template is without any recourse whatsoever to PG&E, SCE, SDG&E, SCG, or their affiliates. The template is a draft, and anyone using this document should seek the advice of an attorney to develop appropriate ordinance language to meet its jurisdiction’s specific needs, as state and local laws may differ.
Please contact the Codes and Standards Reach Codes Team at [email protected] for additional information.
T his document is the product of a collaborativ e effort by B uilding D ecarbonization C oalition, B ay R E N, PC E /S V C E , and the I OU S tatewide C odes and S tandards, R each C odes Program.
This program is funded by California utility customers and administered by Pacific Gas and Electric Company, San Diego Gas & Electric Company (SDG&E®), Southern California Edison Company and Southern California Gas Company (SoCalGas®) under the auspices of the California Public Utilities Commission and in support of the California Energy Commission.
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NEW CONSTRUCTION MODEL REACH CODE , ELECTRIC- PREFERRED VERSION 3.0
What’s New .......................................................................................................................... 2 Scope .................................................................................................................................... 2 Instructions ........................................................................................................................... 2 Sample Amendments ............................................................................................................. 4 Purpose .........................................................................................................................................4 Definitions .....................................................................................................................................4 Nonresidential and High-Rise Residential Buildings .........................................................................5 Mandatory Solar PV Requirements ...................................................................................................................... 5 Performance Requirements ................................................................................................................................. 6 Prescriptive Requirements ................................................................................................................................... 7 Low-Rise Residential Buildings .......................................................................................................9 Performance Requirements ................................................................................................................................. 9 Prescriptive Requirements ................................................................................................................................. 11 Other Sample Ordinance Sections ........................................................................................ 14 Appendix A: Low-Rise Residential Performance Values ......................................................... 16 Table A.1 – EDR Values for Low-Rise Residential Performance Requirements ............................................. 16 Appendix B: Sample Findings ............................................................................................... 17
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NEW CONSTRUCTION MODEL REACH CODE , ELECTRIC- PREFERRED VERSION 3.0
What’s New
• This model reach code ordinance, which is based on and replaces the Electric-Preferred Version 2.5, adds specific requirements for high-rise (4 stories or more) residential buildings. It has also been reorganized for easier reading.
Scope
• All new mixed-fuel buildings must comply with stricter performance or prescriptive requirements where they have been found to be cost-effective. There are exceptions for ADUs and hospitals.
• All new nonresidential and high-rise (including mid-rise) residential buildings must install a solar PV system as a mandatory measure (already required for low-rise residential).
Instructions
• This is one of three versions. The Electric-Preferred version requires higher efficiency for mixed-fuel buildings. The Fuel-Neutral version requires higher efficiency for all buildings.
The All-Electric version requires all-electric for the most common occupancies and higher efficiency for other mixed-fuel buildings. All versions require solar PV. The latest version of this document and supporting materials are available at LocalEnergyCodes.com. • The performance values and prescriptive measures are based on results from cost effectiveness studies. Jurisdictions may choose a more tailored approach based on the studies, for example, modifying the ordinance to require higher energy performance from all-electric buildings. The Codes and Standards Reach Codes team is available to assist jurisdictions with this process.
• Jurisdictions may also wish to modify elements of the ordinance, such as those marked with the text “[Option]”. For example:
o Adding the electric-readiness supplement for nonresidential and/or residential buildings (requires mixed-fuel buildings to install infrastructure to facilitate future conversion to electric equipment);
o Modifying exception for Accessory Dwelling Units (ADUs). • When modifying the language, ensure all Standards references are maintained and the ordinance still meets the CEC requirements. Also, edit the Purpose section to reflect the changes.
• Prescriptive requirements vary by climate zone and are a complete package of measures that achieve similar efficiency levels as the performance requirements. Those requirements that are not applicable to the climate zone must be deleted and subsequent paragraphs renumbered.
• The model language is intentionally detailed. Jurisdictions may wish to pare it down and leave more discretion to the building administrator. Some of the details could be moved to guidance documents.
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NEW CONSTRUCTION MODEL REACH CODE , ELECTRIC- PREFERRED VERSION 3.0 • Sample findings are presented as Whereas clauses; alternatively, they may be incorporated as express findings in the ordinance, referenced as an attachment or passed as a separate resolution based on local practice.
• Local authorities for some of the proposed requirements are untested. For example, the electric readiness provisions in the supplement are proposed without a cost-effectiveness analysis on the advice of CEC staff that they are not, in themselves, energy performance requirements.
• The headings, footnotes and instructions (in blue) are for staff reference and should be removed in the final ordinance.
• The draft ordinance text, sample findings and CEQA determination language are provided as examples only. Ensure all ordinance materials are reviewed and verified by relevant jurisdiction staff and the city/county attorney.
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NEW CONSTRUCTION MODEL REACH CODE , ELECTRIC- PREFERRED VERSION 3.0 ORDINANCE AMENDING THE [City/County of Jurisdiction] BUILDING CODE TO REQUIRE